Sales of new private homes surged last month to a near three-year high, data from the Urban Redevelopment Authority (URA) showed yesterday, increasing the likelihood that the government will intervene yet again to cool the white hot market.
Developers sold 2,487 homes last month, up 3.9 per cent from 2,393 units in March and up 37.8 per cent from the 1,805 units in April last year.
Last month’s number was the highest since July 2009, when 2,772 new units were sold. April’s sales extend the sharp recovery in the growth of transactions since January, when new home sales jumped nearly three times from December. It was the first time that new home sales exceeded 2,300 units for three straight months as buyers continued to flock to the property market amid persistently low interest rates.
Yesterday’s data release came a day after minister for National Development Khaw Boon Wan warned in Parliament of further policy steps to cool “pockets of hot activity” in the property mass market.
He was particularly concerned about the growing numbers of small apartments dubbed shoeboxes, which are popular with investors who live in HDB flats seeking rental incomes.
Jones Lang Lasalle’s head of research, Dr Chua Yang Liang, reiterated his firm’s position “that the policy to curtail excessive demand of developer sales could come into the market within the next few weeks. Possible measures include more stringent control over the issuance of developers’ sales licences and further tightening of existing policies.”
Underlining the strength of buying fervour, April’s sales exceeded new launches for the month of 2,386 units. Savills’ head of research Alan Cheong said the notable launches were Seahill at West Coast (454 units), Hillsta at Choa Chu Kang (416 units), Katong Regency (244 units) and Sky Habitat at Bishan (509 units).
ERA’s key executive officer Eugene Lim noted that more than half of the homes at the sold out Katong Regency are one-bedroom units. He said that across all projects, sales were concentrated in the S$650,000 to S$850,000 range, with HDB buyers forming half of the purchasers in this price range.
The threat of further government intervention may only have a limited impact on the market.
Cheong said: “Notwithstanding the drum beat of new policy measures, the market is currently still very buoyant and exuberant.
“Barring any substantive changes to interest rate and/or CPF policies, we believe that potential buyers have psychological wherewithal to absorb the impact of further measures given that they have been desensitised after being tested to the limits with five rounds of wolf calling.”
For now, the government is continuing to step up supply – it announced yesterday the release for sale of five sites for private housing. The URA said the sites could yield a total of 2,100 homes, which will form part of some 14,000 residential units to be released under the government Land Sales programme for the first half of 2012.