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More new units launched but private home sales fall in January

SINGAPORE — Sales of private homes fell 17.8 per cent in January from a year before, even though there were more new units launched by developers last month compared with a year ago.

Analysts attributed the slowdown in take-up rate to different market conditions as well as the locations of the three new launches last month.

Analysts attributed the slowdown in take-up rate to different market conditions as well as the locations of the three new launches last month.

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SINGAPORE — Sales of private homes fell 17.8 per cent in January from a year before, even though developers launched more new units last month compared with a year ago.

There were 433 private residential units sold last month, down from 527 last January, figures from the Urban Redevelopment Authority (URA) showed.

Developers put up 498 units last month, compared with just 253 in January last year.

Analysts attributed the slowdown in take-up rate to different market conditions as well as the locations of the three new launches last month.

REASON 1: MARKET CONDITIONS

A greater supply in the pipeline, property cooling measures introduced in July last year as well as slower growth were some factors that analysts said could have caused the lower take-up rate last month.

Mr Nicholas Mak, executive director at real estate investment firm ZACD Group, said that with expectations of more units to be launched in the following months, buyers are adopting a wait-and-see approach.

Besides, there were no cooling measures last January, so the sentiment then was that of “you better buy today otherwise, very soon, prices will go up”, Mr Mak added.

Since the cooling measures kicked in last July, prices of private properties have been increasing at a much slower pace.

International Property Advisor's chief executive Ku Swee Yong said that last month’s figures are a “very telling” sign that demand for private homes is “really weak”.

“General investment sentiment is reduced because en-bloc sales have ground to a halt, interest rates are significantly higher and investors know that the rental market is getting challenging,” he added.

Mr Desmond Sim, head of research for Singapore and South-East Asia at real estate services firm CBRE, said that with the anticipated economic slowdown, present market sentiments are “very different” from a year ago.

“With slower growth and heightened risks looming both on the global and home fronts, sentiments are likely to remain tepid and cautious.”

REASON 2: LOCATION OF NEW LAUNCHES

Some analysts pointed out that the locations of the three new launches also contributed to the slowdown last month.

They were Fourth Avenue Residences in Bukit Timah, Fyve Derbyshire in Newton and RV Altitude in River Valley.

Mr Eugene Lim, key executive officer of property firm ERA, said that with the new projects being high-end properties located in the Core Central Region, the volume transacted is understandably thinner than a typical suburban or city fringe launch.

Ms Christine Sun, head of research and consultancy at property company Orangetee, said: “Sales volume is usually higher when large-scale projects are launched in the Outside Central Region and Rest of Central Region, because prices tend to be lower (compared to luxury homes) and more buyers can afford these homes”. 

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