New private home sales stagnated again last month during the Hungry Ghost Festival with no new condo launches to tempt buyers.
Developers moved 495 private homes in August, 69.3 per cent below the 1,611 sold in July, according to Urban Redevelopment Authority data yesterday.
This was comparable to the 437 homes sold in August last year and similar to the 400-500 monthly sales level seen in months when no new projects were launched.
July's sales spiked, thanks to strong interest at the attractively priced High Park Residences in Sengkang. It was also the best selling project in August, moving 76 units at a median price of $933 per sq ft (psf).
Overall primary sales numbers for this year could just match last year's total of 7,400 units, said Mr Alan Cheong, Savills' senior director of research and consultancy.
"These numbers do not a healthy industry make... As secondary sales take their cue from primary sales, primary sales should preferably be in the 10,000 to 12,000 units per year range for the real estate service industry to function normally," he said.
Low transaction volumes especially hit the smaller agencies, which are wholly dependent on residential sales and may not have large valuation departments or investment sales teams, he noted.
While last month's weak sales were within expectations as developers had held back launches, transactions this month are expected to be stronger with the launch of the 663-unit Principal Garden in Prince Charles Crescent, said PropNex Realty chief executive Mohd Ismail.
The higher income eligibility ceiling for executive condominium (EC) buyers introduced last month did not appear to lift sales significantly. Developers sold 466 EC units in August compared with 495 units in July and 110 units in June.
Sol Acres EC was launched last month and sold 259 units at a median price of $787 psf - a favourable outcome given the Hungry Ghost Festival and possibly due to the relatively low prices, said ERA Realty key executive officer Eugene Lim.
Sol Acres EC managed to maintain sales momentum after the launches of The Brownstone EC and The Vales EC in July, which together have 1,155 units, noted Mr Ong Teck Hui, JLL national director of research and consultancy. No new ECs were launched in June.
Yet unsold EC inventory has been building up. The take-up rate was 42.9 per cent in July and 65.9 per cent last month, said Mr Nicholas Mak, SLP International executive director. "In August, the number of launched and unsold EC units rose to 3,160 units. This is the first time since mid-2007 when such statistics were made available, that (it) exceeded the 3,000-unit level," he said.
The market's muted response to the higher income ceiling could be due to a number of factors, including a developer's track record, finishings, location, tougher lending rules and the many unsold EC units, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia.
But there should be a five to 10 per cent increase in EC sales volume this year over 2014 due to the higher number of launches and the larger pool of qualifying buyers resulting from the higher income ceiling, he added.
Upcoming launches include Signature at Yishun this month; and Wandervale in Choa Chu Kang, The Criterion in Yishun and Parc Life in Sembawang later this year.
