Sales of new private homes in Singapore rebounded last month, rising 17 per cent from the previous month after falling 25 per cent in June, as superstitious buyers jumped into the market ahead of the Hungry Ghost Month.
According to data from the Urban Redevelopment Authority (URA), developers sold 1,386 private housing units last month, up from 1,182 in June.
Homes in the suburban areas, classified as Outside Central Region, accounted for 54 per cent or 754 of the units. The city fringe (Rest of Central Region) and central areas (Core Central Region) accounted for 37 and 9 per cent, respectively.
Including Executive Condominiums (ECs), home sales surged 40 per cent to 1,954 units last month from the previous month.
Analysts attributed the increase in sales to seasonal effects.
Dr Chua Yang Liang, head of research, South-east Asia, at Jones Lang LaSalle, told MediaCorp: “This is likely due to the Hungry Ghost Festival in August, when sales traditionally fall, as buyers secure units in advance of the slowdown.”
He noted that there was a similar trend in the past two years, with the month before the Hungry Ghost Festival registering a run-up in sales, before transactions fall off as both buyers and sellers held back during the Seventh Lunar Month that they considered inauspicious.
Li Hiaw Ho, executive director at CBRE Research, added that the strong sales were also driven by persistently low mortgage rates and by product attributes of new projects.
Interestingly, while sales climbed, the number of new launches continued to fall, down by 11 per cent to 1,435, excluding ECs.
As such, the take-up rate shot up to 97 per cent last month compared to 73 per cent in June.
Still, on a year-on-year basis, the number of private homes sold fell 11 per cent from 1,553 units in July last year.
And in light of key policy changes to the public housing market, including the ramping up of the number of Built-To-Order flats as well as the increase in the household income ceiling, property consultancy Jones Lang LaSalle estimates that annual demand of private units will be reduced by 700 to 2,000 units.
Although sales transactions are expected to fall, prospective buyers waiting for prices to come down will be disappointed, given the prevailing low interest rates and the volatility in the global stock markets, some analysts said.
Colin Tan, head of research and consultancy at Chesterton Suntec International, believes the downside is “limited”.
“Because out of this chaos, Singapore has emerged as one of the few economies that still has a triple-A rating,” he said, referring to the Republic being an even more attractive investment destination amid the worsening sovereign debt crises in the United States and the euro zone.
Others said demand will be more likely to be influenced by external factors than domestic policies.
Ong Teck Hui, head of research and consultancy at Credo Real Estate, said: “The concern now is not so much about the HDB measures, but more about the deterioration in the external environment and our own economic outlook for the rest of the year. There seems to be more uncertainty relating to debt, and that is likely to affect sentiment and hence demand ultimately.”