Private home sales drop 34% in Sept to year’s low

SINGAPORE — Sales of new private homes plunged 34 per cent last month to their lowest this year, as developers refrained from launching new projects because of both the Hungry Ghost Month and the General Election (GE), while multiple headwinds continued to keep buyers cautious.

Developers sold just 341 units of new private homes last month, down from the revised 513 units sold in the previous month, data from the Urban Redevelopment Authority showed today (Oct 15). From a year ago, new private home sales were down 47 per cent, with developers selling 648 units in September last year.

“We didn’t expect the figure for last month to be that low... We thought that we would see monthly sales of 500 to 800 units,” said Mr Ku Swee Yong, chief executive of property firm Century 21. 

“Although there were no new private home launches and just one Executive Condominium (EC) launched, last month’s sales could have been affected by the General Election and the tail-end of the Hungry Ghost period. This is below my expectations and shows that market sentiment is still weak.”

The Hungry Ghost Month, considered by some to be an inauspicious period for buying homes, ended on Sept 12, while GE2015 was held on Sept 11. Buyers were also held back by concerns over the economic outlook and rising mortgage costs, analysts said.

“The contraction in sales volume last month could be due to the investors’ fear of a possible technical recession and hike in interest rates. As some potential homebuyers chose to adopt a wait-and-see approach, the demand for private homes softened,” said Mr Nicholas Mak, executive director of research and consultancy at property firm SLP International.

Yesterday, Ministry of Trade and Industry data showed Singapore escaped a technical recession in the third quarter by a hair’s breadth, with quarter-on-quarter growth of 0.1 per cent. Last month, the bestselling development was High Park Residences in Fernvale with 46 units sold, followed by Botanique at Bartley with 38 units sold, and Highline Residences at Kim Tian Road with 21 units sold.

The Outside Central Region (OCR), or suburbs, accounted for the bulk of private home sales with 253 units sold, while the Rest of Central Region (RCR), or city fringes, accounted for 68 units and the Core Central Region (CCR), or city centre, rounding up the balance of 20 units.

In the EC segment, a total of 288 units were sold last month, 38 per cent lower than the 466 units transacted in the preceding month. At Signature at Yishun — the only EC project launched last month — buyers took up 93 units from the 525 units launched.

September’s figure brings total private homes sold in the first nine months to 5,963 units, down a little over 1 per cent from the 6,030 units in the same period last year, but a 53 per cent drop from the 12,666 units taken up in the corresponding period two years ago.

The year-on-year declines “show the sustained impact since the Total Debt Servicing Ratio framework was imposed in June 2013. Based on the above trend, private new home sales could be headed for an annual take-up of about 8,000 units in 2015 — one of the lowest in recent years”, said Mr Ismail Gafoor, CEO of PropNex Realty.

The last quarter of the year should see a rebound in transaction volume as a result of the planned launches of several developments, Mr Ismail said, but he warned that the continued enforcement of cooling measures will continue to sap demand and will prevent any market pick-up from being sustained.

Mr Eugene Lim, key executive officer at property agency ERA, said Thomson Impressions at Lorong Puntong and Principal Garden at Prince Charles Crescent are targeted to be launched at the end of this month, while The Andrew Residences at Potong Pasir is expected to be launched next month.