Singapore home sales unlikely to beat last year’s record

SINGAPORE: Sales of new private homes may come close to last year's record high, but they are unlikely to surpass the figure, with global economic uncertainty affecting demand, according to experts.

Home sales for the first nine months of this year came in at a slightly more robust 12,301 units compared with 12,051 units in the same period last year.

However, experts said a slower final quarter was likely to leave the final figure below last year's tally. Developers sold a record-breaking 16,292 homes last year as rock-bottom interest rates and pent-up demand from first-timers and upgraders drove the property market to a new high.

Experts noted that low interest rates and a sound local economy should underpin private home buying demand.

However, the gloomy economic outlook has dampened market sentiment. Four rounds of cooling measures the latest in January have also removed the speculative froth.

Colliers International research and advisory director Chia Siew Chuin said the ongoing economic turmoil in the West would rein in demand to some extent. The year-end festive season and school holidays could also sideline potential buyers.

“Considering these factors, demand for new homes in the final three months of the year may come in slightly lower than that seen in the third quarter of this year,” Chia said. She expects the full-year sales volume to be between 15,000 and 16,000 units.

But Credo Real Estate research and consultancy head Ong Teck Hui noted that though cooling measures had cut demand from speculators and short-term investors, demand from genuine buyers had persisted. It was possible this year's total would be close to last year's, he added.

CB Richard Ellis Research executive director Li Hiaw Ho said the market had turned more cautious on the government's outlook of slower economic growth due to eurozone woes.

“It is unlikely that we will see the same level of take-up as the second and third quarter, even with prices remaining stable. While we expect new home sales volume this year to exceed 15,000 units, it remains to be seen whether it can surpass the record volume last year.”

Already, secondary market transactions had fallen considerably. The 3,604 units sold in the three months to Sept 30 was the lowest quarterly figure since the market recovery in mid-2009, Ong noted.

By Straits Times Singapore