Sales of private homes last month defied the heightened global economic uncertainties, stock market volatility and the Hungry Ghost festival – a month when buyers traditionally avoid property purchases.
The number of new homes sold last month fell just 3.6 per cent to 1,398 units – excluding Executive Condominiums (ECs) – compared to July. While a drop in sales had been expected – after a 17-per-cent rebound in July – analysts felt the marginal decrease suggests that the property market here could be more resilient than many had expected.
Developers also maintained the number of new projects launched, last month seeing only a drop of 0.1 per cent in new launches.
Ms Chia Siew Chuin, director of Research & Advisory at Colliers International, also said that the “healthy sales volume” was achieved despite policy changes to raise the income ceiling for HDB flats and EC units.
“The sustained buying interest points to confidence in the fundamentals of Singapore’s residential property market,” said Ms Chia.
Sales of new homes in the Outside Central Region (OCR) lifted the numbers, totalling 1,114 units or 82.6 per cent of all units sold. Ms Chia noted that this was the highest number of units sold in the region this year and the highest proportion of sales seen for all three sub-markets since the start of the Urban Redevelopment Authority monthly sales data series in June 2007.
However, prices in the OCR did fall to between S$600 and S$1,679 per sq ft last month, from between S$705 and S$1,742 per sq ft in July. “This could be due to developers’ more competitive pricing strategy amid increased prudence and price sensitivity among potential home buyers,” said Ms Chia.
According to Jones Lang LaSalle’s (JLL) analysis of median high and low prices in the OCR, the variation in pricing is negligible and has remained relatively stable over the long term.
“If we look at the highest median price recorded where more than one unit has been sold in a development, and the same for the lowest median price in the OCR, it can be seen that pricing levels have remained relatively stable over the past two years, especially at the high end,” said Dr Chua Yang Liang, head of research for South East Asia at JLL.
Outside the OCR, launch and sales activity fell significantly. In the Rest of Central, only 249 units were launched and 169 sold. Activity in the Core Central Region continued to contract with only 29 units launched and 65 units sold.
Dr Chua said that overall property prices may compress if there is further shock to the system, “but otherwise, it is likely to remain fairly stable”.
Li Hiaw Ho, executive director, CBRE Research, said: “The take-up of new homes (excluding ECs) will be dependent on what new launches are offered and their price points.”
He added that it is possible that the total new homes sold this year could reach 15,000 units, compared to last year’s 16,292 units and 2009′s 14,688 units.