The month of October saw a slowdown in the private home segment. Despite the year-end dip in buyer interest, observers say demand will still hold strong.

(Demand stands strong for private homes in Singapore.)

The private housing sector recorded 1,387 sales – a 15% drop from September’s 1,631 tally. When executive condominiums (ECs) – private-public housing hybrids – are added to the mix, the total count would be pushed up to 1,638 homes sold. Even still, the figure would have been 20% fewer than last month’s 2,064.

Yet the statistics, recently released by the Urban Redevelopment Authority, do not seem to ruffle the feathers of industry watchers, who revealed to The Straits Times that October’s private housing sales figures still indicate a healthy and stable demand.

They observed that the reason for the significant difference in sales performances was not just a temporal decline in buyer interests, but to a larger extent September’s “unusually high” sales record, driven by the 638 units sold at Treasure Trove at Punggol, as well as the raised income ceiling for EC buyers. The latter made more home seekers eligible to purchase ECs, spawning a sudden spike in demand and ultimately, sales.

In contrast, the significantly lower October sales record was mostly due to a quieter private home scene. Last month saw a decline in the number of new units launched by developers, by over 50%. As one can expect, fears over the euro zone debt crisis continue to dampen buyer confidence in this “sentiment-driven” housing segment, according to head of research at Jones Lang LaSalle Dr Chua Yang Liang. Other analysts also noted how preference for affordably priced projects is especially prominent in light of the current global economic uncertainties. Furthermore, last month’s slow sales could be foreshadowing the seasonal slowdown commonly experienced in the last three months of every year.

What, then, will the private homes segment be like for the last two months of 2011?

Despite the foreseen year-end slack, industry analysts are not ruling out the possibility of an upswing in November. True enough, the earlier half of this week saw the quick-fire sale of some 200 units at the preview of The Palette in Pasir Ris. If this is any indicator of interest levels of buyers, the several launches – including two Bedok projects and one development in Sembawang – slated to enter the market toward the end of this year should enjoy keen buyer interest.

However, while Credo Real Estate research and consultancy head Ong Teck Hui revealed that the first 10 months of 2011 outshone the same period last year, with 13,688 and 13,117 private sales recorded respectively, most experts added that the last two months of November and December will likely prevent 2011’s tally from exceeding that of 2010. This is because while some buyers’ hesitance may be due to the continued gloomy economic outlook, others may be put off their buying intentions due to plans for the December school vacation and festivities, said Chia Siew Chuin, director of research and advisory at Colliers International.