New Private Residential Sales Cool Down in October

RESIDENTIAL MARKET

New private home sales cool rapidly in October

New private home sales plummeted 26 per cent last month as the sixth round of cooling measures took some heat out of the market.

Buyers snapped up 1,948 units in October compared with 2,621 in September - a decline likely caused in part by an Oct 5 policy change aimed at preventing buyers from over-extending themselves.

If executive condominium units were included, last month's sales would total 2,624, with suburban units again powering the new-homes market.

Last month's slower sales will not prevent this from being a landmark year for residential property. There were 19,507 private homes sold in the first 10 months - easily eclipsing the record of 16,292 sold in all of last year.

Experts say the latest cooling measures probably hit buying sentiment, but developers also took a breather, holding back launches as they took stock of the possible impact.

ERA Realty key executive officer Eugene Lim said that while sales volumes fell, the fact that almost 2,000 new units were transacted indicates that the market remains robust. Home buyers have quickly got used to the new restrictions, he added.

New-sales figures last month also look strong given that the average monthly sales were 1,364 units last year and 1,385 in 2010.

"The market will continue to be fuelled by high liquidity and attractive home loan interest rates. Also, private property and Housing Board home owners who have made profits are re-investing their gains into the property market," Mr Lim said.

"So market confidence is still high, despite warnings of a slower economy going forward."

As developers have sold most units in previously launched projects, especially in suburban areas, more launches can be expected in the lead up to Christmas.

These include the 483-unit Eco Sanctuary, the Echelon with 508 units, the 338-unit Sennett Residence and Spottiswoode Suites, a development of 175 homes.

Most experts expect sales this year to hit a record of about 22,000 units.

Source: The Straits Times –16 November 2012