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Sales of new private homes sink in March

SINGAPORE — New private home sales sank back into the doldrums last month after showing some sign of life in February, and analysts warn that low volumes could be the norm in the coming months amid the continued stand-off between buyers and sellers in the housing market.

SINGAPORE — New private home sales sank back into the doldrums last month after showing some sign of life in February, and analysts warn that low volumes could be the norm in the coming months amid the continued stand-off between buyers and sellers in the housing market.

The Urban Redevelopment Authority (URA) yesterday said developers sold 480 private homes last month, a sharp fall from the 739 units they offloaded in February and the 2,793 units in March last year. The decline came although developers launched more units last month, with 724 homes offered for the first time, up from 691 in February.

More than 80 per cent of the newly launched homes were from the 597-unit The Santorini condominium in Tampines, developed by MCC Land. Only 76 units in the project were sold, as the developer had priced the homes higher than most prospective buyers were willing or able to pay in the current environment, contributing to the low overall monthly volume, analysts said.

“There were only two new projects that were launched: One of them is quite small and the other is The Santorini, whose pricing may have been perceived by some buyers as high. So, that resulted in the low take-up rate,” said Mr Nicholas Mak, Executive Director of Research and Consultancy at property firm SLP International.

Homes at the development were sold at a median price of S$1,108 per square feet, the URA data showed. Despite the poor take-up rate, The Santorini emerged as the best-selling project in terms of total units sold last month, followed by the previously-launched Rivertrees Residences and The Glades, where 35 and 27 homes were sold, respectively.

The other new launch, Ascent@456 at Balestier Road, failed to register any sale of its 28 units.

Analysts said repeated rounds of property market cooling measures and loan curbs, especially the introduction last June of the total debt servicing ratio (TDSR) framework, have made prospective buyers much more selective. As such, developers will continue to find it difficult to sell new units unless they are willing to price them attractively.

“Nowadays, it is extremely rare to find projects that can be sold out within two months. It now takes longer to sell out. We see big projects with more than 500 units sell 20 to 30 per cent at the launches, then 30 to 40 units each month after that,” Mr Mak said.

Ms Christine Li, Head of Research and Consultancy at OrangeTee, said the market for new home sales is expected to “gradually improve” in the coming months when more attractive projects, such as Lakeville condominium at Jurong Lake District, hit the market. However, the sales volume is unlikely to breach the 1,000-unit level that were the norm in pre-TDSR days.

“Sales will probably improve from the January-to-March period because projects in the pipeline generally have good attributes in terms of location. But the improvement will be gradual, and hitting 1,000 a month is very tough unless the project is very, very attractively priced,” Ms Li said. She predicted developer sales to range from 600 to 800 units a month in the following months.

Ms Chia Siew Chuin, Director of Research and Advisory at property firm Colliers International, saw “little respite” for the private residential property market in the short term.

“This is in view of the continued enforcement of the cooling measures, the tentative recovery of the global economy, as well as long-standing concerns of potential interest rate increases and a mounting supply of homes,” she said.

“In light of the various headwinds, the theme of affordability will persist and home buyers are expected to remain highly selective in their purchases,” she added.

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