New private home sales fell 65% in Feb, but rebound on the cards

SINGAPORE — Sales of new private homes plummeted 65 per cent in February from the previous month, a drop which analysts ascribed to a “knee-jerk” reaction to the latest round of cooling measures and a lull in the market because of the Chinese New Year holiday.

However, they said they expected volumes to rebound sharply this month as developers launch new projects with sweeteners to woo buyers — and, indeed, signs of an uptick are already in evidence, with more launches and strong sales in some developments.

A total of 708 new private-residential units were sold last month — the first full month after the Government imposed fresh housing curbs on Jan 11, a massive drop from the 2,016 units in January, according to data from the Urban Redevelopment Authority.

Demand also dropped sharply from the 2,417 units sold in February last year. Sales last month were the smallest number since December 2011, when only 632 units were sold, again following the introduction of cooling measures.

The figures came as no surprise to property market watchers.

Mr Mohamed Ismail, Chief Executive of PropNex Realty, said the latest round of cooling measures — including higher additional buyer stamp duties, lower loan-to-value-ratios, larger down payments — has left many prospective buyers adopting a “wait-and-see” attitude before signing on the dotted line for a new home.

In addition, the Chinese New Year holidays, typically a lull period for the property market, meant that developers held back on project launches for the month and this was evident in the fact that only 261 new units were launched, he said. The tiny number of units brought to the market was highlighted by the fact that 1,802 — around seven times as many — were launched for sale in January.

The introduction of more cooling measures in January was an additional factor in developers delaying new launches, according to Mr Eugene Lim, Key Executive Officer at ERA Realty Network. The developers have been “cautious”, he said, as they assess how the market has reacted to the Government’s attempts to rein in prices.

D’Leedon was the top-selling project, with 166 units sold at a median price of S$1,540 per square foot. Q Bay Residences in Tampines saw 74 units sold at a median price of S$1,041 psf.

Mr Nicholas Mak, Executive Director of Research & Consultancy at SLP International Property Consultants, noted that a higher proportion of units were sold in the high-end Core Central Region (CCR) than in the city fringe area. The market share of private homes sold in the CCR grew from 17.4 per cent in January to 28 per cent last month.

The mass market segment, however, experienced a loss in market share from 63.9 per cent in January to 48.2 per cent last month.

“These sales figures show that the cooling measures have discouraged cash-strapped homebuyers in the mid-tier and mass-market segments from overextending themselves,” said Mr Mak.

Looking ahead, analysts expect sales to increase sharply this month.

“New home sales in March could double February’s volume as more new projects are launched,” said Mr Joseph Tan, Executive Director, Residential, at CBRE.

Sales figures for City Developments’ D’Nest condominium appear to support the view that demand has picked up again, with an “overwhelming” response at yesterday’s sales preview. City Developments said that as at 5pm yesterday, more than 350 units out of 450 on offer had been sold, resulting in the release of additional units.

Ms Chia Siew Chuin, Director of Research & Advisory at Colliers International, said: “After the lull in February, primary sales volume for March is expected to improve to hover around 1,200 to 1,500 units.”

“Developers are likely to continue dangling sweeteners … which have proven to be relatively successful in luring home buyers. Such sweeteners may come in various forms to cushion the impact of the ABSD — such as part-absorption of the stamp duty, price discounts, early bird or VIP preview prices,” she said.

Impending launches include Sennett Residence, Trilinq, Sant Ritz, D’Nest, Bartley Ridge, Kingsford@Hillview Peak, Urban Vista and Hillion Residence, she said.