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Demand for new private homes weak despite Jan sales rise

SINGAPORE — New private property sales more than doubled last month after falling to a near-five-year low the previous month, but demand remained tepid as developers held back from launching new projects and buyers stayed on the sidelines as various measures that have cooled the market continued to have an impact.

An architectural model seen at the launch of The Hillford, Singapore's first ever retirement resort. TODAY file photo

An architectural model seen at the launch of The Hillford, Singapore's first ever retirement resort. TODAY file photo

SINGAPORE — New private property sales more than doubled last month after falling to a near-five-year low the previous month, but demand remained tepid as developers held back from launching new projects and buyers stayed on the sidelines as various measures that have cooled the market continued to have an impact.

A total of 565 new private homes were sold last month, the Urban Redevelopment Authority (URA) said yesterday, an increase from the 259 sold in December. Compared with a year earlier, however, sales were still 72 per cent lower than the 2,028 units sold in January last year.

Half of last month’s tally came from a project touted as Singapore’s first retirement resort, The Hillford. Despite the development’s shorter lease of 60 years, buyers young and old snapped up all its 281 apartments in Jurong on the first day. This was in stark contrast to the interest in two other launches in Ang Mo Kio last month: The Panorama condominium managed to sell only half of the units released, while the Floraview condominium sold only one unit.

In all, 549 homes were launched last month, up from 118 in December but down from 1,814 a year earlier. Supply is traditionally lower during the Chinese New Year period, said analysts, with developers preferring to save their launches for after the festive season.

“The Hillford demonstrates that if you push out a product which the market wants at the right price or quality, you can still do quite well,” said Mr Colin Tan, Suntec Real Estate Consultants’ Director of Research and Consultancy. “The buyers are out there and there is still a lot of money in the market, it is only a question of how to entice them.”

He added that the price point of The Hillford, at a median of S$11,894 per sq m, was lower due to its shorter tenure, and was therefore able to attract more buyers.

While The Panorama was also a good product, the median price of S$14,456 per sq m could have priced out HDB upgraders, said Mr Nicholas Mak, SLP Executive Director for Research and Consultancy.

“With the cooling measures in place and HDB prices starting to weaken, it makes it harder for the HDB upgraders to afford a property in the region of S$1.2 million,” he said.

Besides the seventh round of property cooling measures implemented last year, the Total Debt Servicing Ratio (TDSR) framework has also been effective in jamming the brakes on demand. The Monetary Authority of Singapore last week relaxed TDSR loan curbs for homebuyers who bought properties before the June rules were introduced, making it easier for those buyers to refinance mortgages.

Looking ahead, analysts said they expect private home sales to improve further this month and through the rest of the year as developers resume launches, but stressed that sentiment would still be weakened by the cooling measures.

February sales may come in under 1,000 units, Mr Mak estimated, with several new developments in the city fringe and suburban areas — including Rivertrees Residences and Riverbank@Fernvale — likely to cause some stir in the market.

Overall, said Mr Mohamed Ismail, Chief Executive of PropNex Realty, 11,000 to 12,000 new homes may be released into the market by developers this year, citing healthy land sales for residential property last year.

“Nevertheless, excessive growth is unlikely, due to the Government measures and fragile global economic recovery. Homebuyers and investors will continue to remain selective with projects, but those that are priced at the right quantum will see good demand,” he said.

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