SINGAPORE — January’s new private home sales skidded to its slowest start in seven years, as stock market blues affected buyer sentiment and developers refrained from launching new properties in the seasonally slow period ahead of the Chinese New Year holidays.
Developers sold 322 private residential units in January, data from the Urban Redevelopment Authority (URA) showed today (Feb 15), down 16.1 per cent from the 384 units in December. This is the weakest January showing since 2009, when 108 new homes were sold. It is also the lowest since December 2014, when 230 units were transacted.
In the executive condominium (EC) segment, 156 units were sold last month, compared with 120 units the previous, and 188 units in the same period a year ago. Upcoming executive condo include The Visionaire EC , Wandervale EC and Parc Life EC while existing ones include The Terrace EC, Brownstone EC, Waterwoods EC, Signature at Yishun, Skypark Residences, The Vales EC, The Criterion EC, Bellewaters EC, Bellewoods EC.
“The biggest immediate threat to stability in the residential property sector is the volatility in the stock market,” said Mr Ong Teck Hui, national director of Research and Consultancy at JLL. “As the volatility continues, a soft landing for the private home market in 2016 appears less likely. Buyers would become more cautious and developers would be less confident in launching new projects.”
During the last global financial crisis (GFC), when the stock market plunged 62 per cent between October 2007 and March 2009, developer sales dropped 71 per cent from 14,811 units in 2007 to 4,264 units in 2008, noted Mr Ong.
The Straits Times Index has dropped 9.5 per cent so far this year, after falling 14 per cent last year.
Further compounding matters is the prolonged effect of the cooling measures, the economic slowdown and hike in interest rates. Year-on-year, new private home sales fell 14.4 per cent.
“In January, there was a heavy cloud of pessimism arising out of the declining stock market and in the oil and gas sector. Many buyers held back their purchases,” said Mr Alan Cheong, senior director of Research and Consultancy at Savills Singapore. “But bearing in mind all the negativity in the employment and financial market sector, 322 is still quite a decent showing.”
Analysts added that there continues to be traction in the market and developments with attributes such as a good location and attractive pricing will appeal to buyers.
“There is still a momentum that’s underpinned by genuine buyers looking to buy a home for owner occupation,” said Mr Desmond Sim, head of CBRE Research in Singapore and South East Asia.
“The residential market is firmly in the favour of buyers now. Buyers remain spoilt for choice and will continue to be very sensitive to specific attributes of each project.”
In terms of launches, the URA data showed that developers released 146 units into the market in January, down 15.6 per cent from the 173 units in the previous month. Compared with a year ago, last month’s launches were 65.3 per cent lower.
Last month, the Outside Central Region, or suburbs, dominated new home sales, with developers selling 216 private homes in this area. The Rest of Central Region, or city fringes, followed with 80 transactions, while the Core Central Region, or city centre, clocked 26 units, said the URA.
The Poiz Residences, located next to Potong Pasir MRT Station, was once again the best seller of the month, noted Mr Eugene Lim, key executive officer of property agency ERA, reflecting buyers’ preference for properties with good locational and product attributes.
“January has typically been a slow month for property sales. A better gauge would be the months following Chinese New Year, where a few projects are gearing up for launch. Private projects include The Wisteria and Sturdee Residences, while upcoming ECs include Wandervale and The Visionaire,” said Mr Lim.