Sales of new private homes fell 32 per cent last month to its lowest level this year as the Europe crisis damped demand, but analysts expect the decline to be short-lived.
Private home sales, excluding executive condominiums (ECs), fell to 1,702 units last month from 2,496 units in April, according to data from the Urban Redevelopment Authority. Before May, new private home transactions had topped 2,300 for three consecutive months, with April’s figure marking a 33-month high.
Including executive condominiums, May’s sales totalled 2,057 units, down from 2,660 the previous month.
“We cannot interpret that this month’s dip in sales will mean that the market is on the decline,” said ERA Key Executive Officer Eugene Lim.
“I think the market is taking a breather because we had three to four months of blistering pace in new home sales … They (developers) are mindful of the demand take up. Most developers will be pricing their units very sensibly to move sales.”
In May, almost 90 per cent of all units transacted were in the mass market, or below S$1,500 psf, said Propnex CEO Mohamed Ismail. Flo Residence sold 266 units at a median price of S$863 psf, 1 Canberra moved 209 units at S$711, Seahill sold 200 units at S$1,383psf, and Eight Riversuites sold 192 units at S$1,340 psf. The four projects accounted for 867 units, or more than half of all units sold in May, Propnex said.
Nonetheless, transactions remain at elevated levels. May’s sales represent a 8.1-per-cent on-year increase, while the 10,880 new homes sold between January and May marks a near 54 per cent jump from the same period last year.
“The Singapore economy is still stable, unemployment still low, interest rates are still low. As more interesting projects are launched, the pace may pick up again,” said ERA’s Lim.
There are 39 new sale sites expected in the second half of the year, which can potentially yield more than 14,000 new private homes, said Propnex’s Ismail, adding that he expect new private residential properties sales figures to be between 2,000 and 2,200 units per month in the short-term, with ECs continuing to do well.
Alan Cheong, head of research at Savills Singapore, concurred, saying that transactions might even hit a record in July, boosted by the launch of several projects, including Riversails at Upper Serangoon Crescent, Five on Shenton and Leedon Residence. The three projects together will provide about 1,900 units.
“Developers will have perhaps a small window of opportunity to launch from the period about the end of the June school holidays to the start of the voracious ghosts fete beginning August 17. We may likely see record sales for the month of July,” he said.