June private home sales (including ECs) plunged 16% M-on-M to 1,725 units transacted. When ECs are excluded, a total of 1,371 units were snapped up last month, marking the lowest number of transactions in 2012. Even with this plunge in sales volume, developers have sold an exceptional 14,689 private homes (including ECs) in the first six months of 2012 – well exceeding the 9,446 racked up at the same time last year.
“It is not surprising to see the decline in private housing transactions last month due to the lowest new project launches in June. This had left homebuyers with lesser choices,” remarked Mr Mohamed Ismail, CEO of PropNex Realty.
In June, the majority of transactions came from projects in the Outside Central Region (OCR), with three projects having sold over a total of 719 units: River Isles sold 263 units at a median price of $835psf, Sea Esta sold 255 units at a median price of $906psf, and Watercolours (EC) sold 201 units at a median price of $735psf.
Despite falling by 16% M-on-M in the overall transaction volume in June, the OCR continued to enjoy strong sales activity, with total sales reaching 1,465 units, the sixth consecutive month where sales have been in excess of 1,000 units since December 2011.
“Homebuyers are now more cautious in their home buys as they are more price-sensitive these days. Gone are the days that buyers are picking up their homes without careful considerations. Developers should be delighted if they could sell 50% of their project within the first month,” remarked Mr Ismail.
Furthermore, with more than 10,000 new private homes expected to enter the market in the second half of 2012, homebuyers are waiting for more choices in their preferred locations. The increasing prices of private property may also have resulted in some resistance from buyers. Mr Ismail cited the recent 2Q12 URA private property flash estimates whereby the Price Index of private property increased by 0.4% across Singapore.
“The volume of sales should continue to maintain at an average of 1,700 units per month for the next few months, depending on the kind of projects launched. New private homes in the OCR are going to be the driving force for the private property transactions in the next half of the year. There will be pressure for developers to price their projects reasonably as the increased supply will mean that buyers can afford to be more selective in their choices. With the hungry ghosts’ festival starting from 17 August 2012 and is traditionally a quieter month; the number of new launches may slow down in August and September,” predicted Mr Mohamed Ismail, CEO of PropNex Realty.
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