New private home sales sluggish but experts see bright spots

Aerial view of Cairnhill estate and Orchard Road area.
Aerial view of Cairnhill estate and Orchard Road area.PHOTO: ST FILE

New private home sales last month posted their worst showing in over a year, but the figures are not quite as grim as they seem.

The slow start to the year was in line with the release for sale last month of just 146 units from earlier projects - with no new projects launched. In other words, the poor sales numbers largely reflected a lack of new stock on the market.

And the continued stabilisation of new home sales in such a quiet month led some experts to suggest that volumes for this year should stay about the same as last year's.

Developers sold 322 new private homes last month, 16.1 per cent fewer than in December and 14.4 per cent lower than a year back, according to data from the Urban Redevelopment Authority yesterday.

It was the lowest new home sales tally since 230 new homes were sold in December 2014.

But there is still buying momentum underpinned by those looking to purchase a home to live in.

"Buyers are steadily picking up previously launched projects, both private homes and executive condominiums (ECs)," said Mr Desmond Sim, CBRE's head of research for Singapore and South- east Asia. For example, while no new ECs were launched in the past three months, developers sold an average of 155 EC units a month over the period, he said.

Last month's sales were encouraging, given the market turmoil of late. It also helps that developers have become more open to giving direct discounts to buyers, said Mr Wong Xian Yang, research manager at OrangeTee. "Some are offering special Chinese New Year promotions, with discounts for all available units and larger discounts for selected units."

The Glades is offering a $38,000 discount for some units and an $8,000 discount for the rest, The Straits Times understands.

Another 20 units at High Park Residences are being dangled at a discount of $23,888 for two-bedroom units and $33,888 for three- and four-bedders.

Median unit prices at the second-bestselling project last month, Kingsford Hillview Peak, have fallen from $1,381 per sq ft (psf) in the fourth quarter of 2014 to $1,288 psf in the fourth quarter of last year. It sold 21 units at a median price of $1,277 psf last month.

But buyers will take their time to decide this year, given the many choices, increased credit checks due to the Total Debt Servicing Ratio, and emerging market volatility.

New private home sales this year could hit about 7,000 - similar to 2014, with 7,316 homes sold, and last year's 7,440 figure.

Experts say January is typically a slow month for property sales. Several projects are set for launch after Chinese New Year, including condos The Wisteria and Sturdee Residences, and ECs including Wandervale and The Visionaire.

Overall, including ECs, developers sold 478 new homes last month, a 5.9 per cent decrease from December and 15.2 per cent lower than a year back.

A version of this article appeared in the print edition of The Straits Times on February 16, 2016, with the headline 'New private home sales sluggish but experts see bright spots'. Print Edition | Subscribe