While prices of completed non-landed homes edged up in August, the overall growth in the property market has slowed considerably.
Property sales down by almost 50%
Across the board, property prices have fallen 0.1% Following the implementation of the property curbs on July 6, the average private property price fell from $1,513 psf to $1,511 psf.
Not a significant dip, but sales volume has taken a real beating with sales falling by 49%. Before the curbs, sales of non-landed homes stood at 5,009 units, and after the numbers fell to 2,543 units.
While some felt that the property curbs came too early, just on the cusp of a market recovery, the authorities stand by their actions. The Government’s concerns stem from rising interest rates and a strong pipeline of housing supply, both of which could quickly derail their previous efforts of stabilising the market.
Although there have been 2 previous rounds of cooling measures, in December 2011, January 2013 and June 2013, this July’s implementation hit home the hardest as it is the only time prices actually fell. The decline could also be a compounded effect of all the previous rounds of curbs.
New launches may face more competition
Developers have been holding back new launches as they wait out the cooling period after the cooling measures were announced.
This means that the market may be seeing more new units soon, perhaps concurrently, which could dilute the buyer pool. Competition would then be high, which may see developers offering discounts to entice buyers.
The conundrum comes however from the high prices which many of the sites were purchased for. Developers may then be unable to lower prices. Average discounts have been 5% or less, till now.
Same developments have offered steeper accounts such as 8.9% at Park Place Residences and 6.6% at Parc Botannia.