Private home sales soared in September, two months after cooling measures

SINGAPORE — The number of new private homes sold last month rebounded sharply from August, indicating that normal service has resumed after the Government’s recent cooling measures, analysts said.

Figures from the Urban Redevelopment Authority (URA) released Monday (Oct 15) showed that 932 private residential units were sold in September, compared with 657 in the same month a year ago.

On a month-on-month basis, sales rose 51 per cent, compared with the 617 units sold in August.

These numbers exclude executive condominiums, which are built by private developers but come with eligibilty and resale conditions set by the Government.

The big leap was mainly supply-driven, the property analysts said, due to a bumper crop of new launches last month.

Close to 1,170 new private homes were launched in September — compared with 534 in August, and 73 in September last year, URA reported.

Ms Christine Sun, head of research and consultancy at property broker OrangeTee, expects between 8,500 and 9,500 new homes to be sold this year. This is higher than an earlier forecast of between 8,000 and 9,000.  

She had earlier expected developers to hold back on their launches with the cooling measures, but many proceeded ahead.

“The sales rebound in September could be attributed to more projects being launched last month that might have spurred buying interest,” she added.

Another factor for the jump this month, which did not come as a surprise to most analysts, was the timing of the annual Hungry Ghost festival as well as a return to normalcy among buyers after the cooling measures were announced.

The Hungry Ghost festival, based on the Chinese lunar calendar, is deemed as an inauspicious time to buy or invest in property. This year, it ran into the first week of September, compared with it lasting through most of September last year.

Ms Christine Li, head of research at property consultancy Cushman & Wakefield, noted that major launches of private residential projects, such as Jadescape, Jui Residences, Mayfair Gardens and the Jovell, took place in the last two weeks of September.

As seen in previous instances when the Government imposed an Additional Buyers’ Stamp Duty (ABSD) or increased its percentage, analysts had predicted that sales for September would recover to levels before the cooling measures.

On July 6, the authorities announced that it would increase the ABSD for Singapore citizens and permanent residents buying their second property and beyond, as well as for all foreigners buying any property.

Mr Lee Sze Teck, head of research at property broker Huttons Asia, said: “We expected numbers to rebound from the low in August. When we look at past (property curbs such as) ABSD, the first month after (the ruling), the volume fell. The second month after (that), the volume went back up.”

DEMAND STILL THERE

Analysts generally agreed that sales figures in September reflected a strong underlying demand for private residential properties, especially for those that are well-located and priced realistically.

The cooling measures have not dampened demand, Mr Lee said, adding that the Government’s intention was not to stop people from buying properties, but to prevent prices from increasing at a pace that “they are not comfortable with”.

First-time home buyers are not affected by the recent measures, he noted.

However, Ms Sun observed that buying sentiments among foreigners have taken a hit, as their share of new non-landed homes have gone down to 4.2 per cent in September, compared with a 10.8 per cent share in the same month last year.

As for the outlook for private home sales for the entire year, most analysts maintained their forecast of between 8,000 and 10,000 units, taking into account the effect that the cooling measures would have on buying demand. They included Ms Tricia Song, head of research for property consultancy Colliers International, who said that the higher number of developers’ sales in September surprised her.

While Ms Sun revised her forecast to predict greater sales for the entire year, the numbers are still below the 10,566 units sold for the whole of last year.

Mr Lee said that even though buying sentiment overall is still strong, the marginal price increase of 0.5 per cent in private home prices for the third quarter of this year — reflected in URA’s flash estimates — showed that the cooling measures have been successful in keeping prices flat.

Ms Song agreed: “Barring an external shock, we expect — on average — prices to hold relatively flat for the rest of the year.”

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