Push factors: Concerns that interest will fizzle out, Hungry Ghost month
By
Joyce Teo
Allgreen held a special preview for its 152-unit One Devonshire last week. Other developers are rushing to launch projects. -- PHOTO: ALLGREEN PROPERTIES
HOME hunters can expect a wider choice as property developers look to bring forward project launches in a bid to ride a strong wave of home-buying. They have been encouraged by a stunning surge in private home sales; figures this week show May sales at 1,668 units - the highest level since August 2007.
Sentiment has improved significantly in recent months, in line with stock market rises, while the sale prices of new homes appear to have crept up from the lows they sank to earlier this year.
But there are increasing concerns this buying wave may not be sustainable. Some analysts argue that the pace of the upswing is too fast and too furious, given that rents are falling amid the weak economy and that a plentiful supply of new homes is coming onstream.
And with the stock market taking a breather, there are worries this will hurt demand. Consultants say some buyers had bought property with the money they made from stocks.
Also, the heat has been confined mostly to certain property launches. HSR Property Group executive director Eric Cheng said the action in the resale market is largely in mass market properties.
Given this, developers with launch- ready projects are likely to be keen to get sales under way quickly. Apart from rushing to get sales permits in order to catch the buying wave, developers would also want to launch before the Hungry Ghost month, said Mr Cheng.
Hungry Ghost month - the 7th month of the lunar calendar - starts on Aug 20 this year. Superstitious buyers may not want to buy a home during this period.
DMG Research said in a report on Tuesday that it expects the sales momentum to persist for the next six to nine months.
Already, the strong sales momentum has reignited interest among developers in buying sites. DTZ Debenham Tie Leung (SEA) on Tuesday put up two sites for tender - the first two official distressed sales sites - to take advantage of the improved sentiment.
'There's been a trending up of take-up rate so this is a window of opportunity for developers to launch their projects,' said its senior director for investment advisory services Shuan Poh.
Read the full report in Wednesday's edition of the Straits Times
