Demand for new private homes, while sturdy, is unlikely to surpass last year’s record sales, and experts have attributed sales figures to the global economic uncertainty.
(Unlike the first nine months, private home sales for the rest of the year is likely to be lacklustre.)
For the first nine months of 2011, home sales totalled 12,301 units, which gave the year a good start. The same period last year saw 12,051 units moved.
Despite the headway, insiders expect the year to go out with a fizzle with a final count lower that that of 2010.
One reason for the less-than-optimistic view is the rock-bottom interest rates and overpowering demand by first-time buyers and upgraders that fuelled a record-shattering number of 16,292 homes sold. In contrast, while private home sales this year have been nurtured by low interest rates and a stable local economy, the poor global economic outlook has certainly been a wet blanket on market sentiments. Additionally, four rounds of cooling measures put in place by the authorities have removed the speculative nature of the industry and allowed a calm to waft over the market.
According to Chia Siew Chuin, research and advisory director at Colliers International, the ongoing economic turmoil overseas will hold demand back to some extent. The year-end school holidays and festivities are also likely to push back demand from 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,” said Ms Chia to The Straits Times.
Colliers expects the combined sales volume for 2011 to range between 15,000 and 16,000 units.
Meanwhile, research and consultancy head at Credo Real Estate Ong Teck Hui observed that despite the cooling measures shaking off demand from speculators and short-term investors, genuine buyers have continued to show a strong demand. As such, there is a chance the year-end total could be close to last year’s, he said.
Taking a less positive stance is CB Richard Ellis Research’s executive director Li Hiaw Ho, who noted how the market has become much more cautious with the government’s euro zone concerns and slower economic growth outlook. “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.”
Indeed, secondary market transactions have already taken a hit. Mr Ong cited how 3,604 units were sold in the three months leading up to the end of September – the lowest quarterly number since the property market recovered in mid-2009. In fact, the 13,076 resale and sub-sale units sold in the first nine months of 2011 were 26% lower than the corresponding period in 2010.
It remains to be seen if developers will lower their prices to give demand a lift. This week, Sim Lian Group’s Parc Vera in Hougang Avenue 7 scored 143 sales at an average price of $800 per sq ft. 80% of the buyers were Singaporeans.
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