(B) The overall performance of Private Residential Property segment

[B.1] Primary home sales heavily sedated in October

[1.1] Total primary sales figures

Official data from the URA showed that only 112 new home units were sold in October 2008, down from 376 units a month ago. In all, 159 new home units were launched in October 2008, much fewer than the 767 units launched in the previous month.  Table [1] below shows the breakdown of the primary sales figures by geographic regions.

Table [1] – New homes sold in October 2008

[1.2] Monthly tally of primary sales

Table [2] below shows the detailed breakdown of primary sales figures by months with comparison between the number of new home units launched and the total number of such units sold. The unsold inventory is piling up.

Table [2] - Monthly sale figures of new home units launched in the respective months

Source of data – URA

[1.3] Performance of primary sales in Core Central Region (CCR)

Out of the 183 brand new condo projects on sale in the Core Central Region, only 9 projects had some sales. In all, the total new units sold in CCR in October 2008 were 14.  See table below for details.

Table [3] – Performance of private new home sales in CCR in October 2008

Source of data – URA

[1.4] Performance of primary sales in Rest of Central Region (RCR)

Out of the 123 brand new condo projects on sale in the Rest of Central Region, only 12 projects had some sales. In all, the total new units sold in RCR in Oct 2008 were 27. See table below for details.

Table [4] – Performance of private new home sales in RCR in October 2008

Source of data – URA

[1.5] Performance of primary sales in Outside Central Region (OCR)

Out of the 141 brand new condo projects on sale in the Outside Central Region, only 24 projects had some sales. In all, the total new units sold in OCR in October 2008 were 71. See table below for details.

Table [5] – Performance of private new home sales in OCR in October 2008

Source of data – URA

[B.2] Secondary home market hit the slippery path in Q3

Likewise, secondary sale of private properties has hit a slippery path, with sales volume going down from the height of 1,728 deals in July 2008 to the sub-1,000-deal level recently. There were only 242 deals in the secondary sales market in November 2008, with no reprieve in sight.

The figures below show the lacklustre performance of the private secondary sale market similar to its primary market counterpart.

Table [6] – Total Secondary Private Sales of condo/apartments so far in 2008

Source of data – SISVRealink

[2.1] More are letting their Option lapse

More purchasers of new home units have been elbowed out of their property deals in October 2008, probably due to the sudden stock market crashes worldwide. Buyer’s confidence is now trapped at the basement level of a skyscraper.

In October alone, about 50-odd new home buyers let their Option to Purchase (OTP) lapse by the expiry dates. This number is five times higher than the norm.

Table [7] – Total no. of TOP lapsed in October 2008

Source of information: Business Times

[B.3] Transaction volume in Q3 rose 9% but value crawled – indicating price dip

In Q3, a total of 4,287 caveats were lodged for private homes (including ECs), covering both primary and secondary markets. It was 9% higher than the 3,934 caveats lodged in Q2.

However, the total value of private homes transacted edged up only slightly to $5.68 billion in Q3 from $5.62 billion in Q2, indicating a price dip. Compared with the previous quarter, island-wide landed home private prices slipped 1.9% quarter-on-quarter.

Prices of apartments/condos in all geographic regions also declined. Below shows the details of price dip across the different segments:

- Core Central Region – home prices declined by 2.7%
- Rest of Central Region– home prices declined by 2.4% 
- Outside Central Region – home prices declined by 1.5%

The average price for high-end and super luxury residential homes stood at $2,065 psf and $3,240 psf respectively in Q3 2008. This was a decline of 14.3% and 12.0% respectively since the beginning of this year.

[B.4] Landed property segment – Sales volume by House Types

[4.1] Sale volume of Detached houses

Sales of detached houses in all districts continue their downward trend in Q3, falling from a total of 69 transactions (including new and resale units) in the previous quarter to 47 deals in Q3. (See table 8 below for details).

Apparently, the detached house market has reacted cautiously to the slew of bad news streaming in from the rich nations. Coupled with the worst performances ever from Singapore’s main economic engine – the manufacturing sector*, more prospective bungalows buyers will do their maths carefully before committing to any purchase.

* Note – the electronic shipments from Singapore, which has already fallen for seven consecutive quarters before October 2008, had plunged by 15% in the previous month.  Singapore’s Non-Oil Domestic exports, which have fallen for six straight months before October, likewise fell 15.3% in October 2008.

Table [8] – Transaction figures of Detached houses in the first 3 quarters of 2008

Source of data – SISVRealink

[4.2] Sale volume of Semi-detached houses

Sales of semi–detached houses were likewise reduced in Q3, after rising marginally in the previous quarter. The factors affecting the semi–D segment are similar to the detached house segment as the prospective buyers are also from the high income groups that are more vulnerable than average wage earners to external economic shocks.

Table [9] – Transaction figures of semi-detached houses in the first 3 quarters of 2008

Source of data – SISVRealink

[4.3] Sale volume of Terrace houses

Sales of terrace houses were down in Q3 after the spectacular rise in Q2 2008. However, when compared with Q1 2008, the performance in Q3 was only slightly subdued.

This shows that the underlying demand for landed homes, especially at the price range of sub-one-million dollar and slightly over a million dollar, is still very strong. The cheaper terrace houses also attract many upgraders from nearby HDB heartland estates and the mid– to high–income groups in general.

Table [10] – Transaction figures of Terrace houses in the first 3 quarters of 2008

 Source of data – SISVRealink

[B.5] Price Trend of landed property segment – by House Types

Prices of landed homes held steady throughout the year and across all house types – probably due to limited supply of quality homes. Many landed home owners are still able to hold on to the mortgages at these early stages of the economic slowdown. However, with the ‘domino effects’ coming from the on-going layoffs and cost-cutting measures across the various industries, prices of landed homes might be affected in six to nine months’ time, if things do not look up sooner.

[5.1] Price trend of Detached houses

As of now, 2–storey bungalows in popular areas such as District 10, 15 and 19 held firmly, though they are expected to come down a shade lower in 2009, due to widespread layoffs in the wake of the worsening economy in Singapore.

Table [11] – Price trend of bungalows in popular districts

Source of data – SISVRealink

*No detached houses in D19 were transacted in the October-November period.

[5.2] Price trend of Semi-detached houses

So far, despite the fewer transactions, prices of semi-detached houses have managed to stay firm, probably due to the limited supply of quality houses in the recent months.

However, the situation may be altered in the next few months when more layoffs occur in tandem with the worsening economy.

Table [12] – Price trend of semi-detached houses in popular districts

Source of data – SISVRealink

*No semi-detached houses in D15 were transacted in the October-November period.

[5.3] Price trend of Terrace houses

Table [13] – Price trend of terrace houses in popular districts

Source of data – SISVRealink

[B.6] Private home rents set to slide

Some experts are predicting that the rent drop could be as severe as over–20% in the next few months, as more corporate layoffs, cost-cutting and capital flights materialise.

Making matters worse is the impending completion of more condominiums in the prime districts. For example, another 681 units at the Sail @ Marina Bay, 172 units at St Regis Residences, and 110 units at Paterson Residence will be available for immediate occupancy from early next year onwards.

[B.7] More developers feeling the heat

Other worrying signs pointing to a slowing property market include news on delays or cancelations of high-profile building projects, and price reduction by developers etc. Here are some examples.

[7.1] Marina Bay IR may open in phases

Due to the trying times ahead, Las Vegas Sands has applied to the Singapore authority to open its casino in Marina Bay in phases from the end of 2009 instead of all at once. This is definitely a bad news for the ailing domestic economy where the unemployment rate is climbing; and thousands of people have been re-trained to take up the various positions promised at the casino.

Itself in serious financial peril, Las Vegas Sands had decided to halt projects in Macau and the United States to conserve cash. However, the gaming giant has vowed to go ahead with the planned Marina Bay Sands casino resort in Singapore, which is expected to cost nearly US$5 billion.

[7.2] CDL shelved South Beach project

City Developments (CDL) and its two joint-venture partners, Istithmar of the Dubai World Group, and El–Ad Group, have shelved the $2.5 billion high–profile South Beach project. The 3.5–ha site at the former Beach Road Camp was won by the CDL–led consortium for $1.69 billion. 

The economic turmoil and the high construction cost were cited as reasons for the stoppage. CDL will delay the project until building costs fall to 'reasonable levels'.

[7.3] District 9 project re–launched at half price

A 75–unit freehold luxury condominium at River Valley Grove, Luma, has been re–launched at half its last year’s original launched price of $2,800 psf.

The transacted prices of Luma units were between $3,349 psf and $3,291 psf in August 2007; and between $2,837 psf and $2,586 psf in April 2008.

Luma sits an en–bloc site at St Thomas Walk which the Novelty Group bought in 2006 for $76.5 million, or about $810 psf of potential gross floor area.

Read the latest updates on other property segments:

Part 1: The impact of the US crisis on the Singapore property market 

Part 3: The non-residential property segment & foreign interest in Singapore

Part 4: HDB resale market & Government Land Sale programme