Press Releases

For media enquiries, please contact corpcomms@propnex.com.

New private home sales plunged as cumulative impact of successive curbs bite
Singapore Property Market News and Analysis


Latest Property Real Estate News - Published on 15/08/2013

Developers sold 481 private homes, excluding executive condominiums (ECs) in July 2013, down a whopping 73% from the 1,806 units sold in June; this is also the lowest recorded transaction volume in recent years. Including ECs, which are a public-private housing hybrid, developers found buyers for 593 homes, reflecting a plunge of 72% from the June’s figure of 2,119 units. Despite the blip, developers have moved a healthy 10,631 units in the first seven months, or a monthly average of 1,518 units. This figure is lower than the 14,181 units that were registered the same time last year (or 25% lower).

“We believe the slowdown is largely due to the knee-jerk reaction following the rollout of the Total Debt Servicing Ratio (TDSR) framework as a more rigorous checklist which will take 10 to 14 days for banks to approve property loans. At the same time, tighter loan-to-value (LTV) limits on second and subsequent housing loans and longer-tenure loans were also plugged. It will take some more time for people to digest not just the loan curbs, but the cumulative impact of all the earlier rounds. Additionally, there were no major project launches in the month of July, adding on to the lowest number of new private homes sold," commented Mr Mohamed Ismail, CEO of PropNex Realty.

Despite no major launches in July, the best-selling projects which performed well were namely Forestville, Vue 8 Residence, Bartley Ridge, Kingsford Hillview Peak, Jewel @ Buangkok and Riversails. Forestville sold 78 units at a median price of $734psf, Vue 8 Residence moved 63 units at $1,004psf. Bartley Ridge found buyers for 25 units at $1,216psf, Jewel @ Buangkok sold 24 units at $1,201psf, whereas both Kingsford Hillview Peak and Riversails sold 18 units each at median prices of $961psf respectively.

Slowing sales to ensue in the near term

“The latest TDSR framework introduced by MAS with loan interest rates pegged at 3.5% may prompt potential homebuyers to take a more discretionary view of home buying with the reduced affordability levels. Analyzing the statistics, it was clearly the upgraders and mass condominium buyers who had curtailed their home investment as Outside Core Region (OCR) homes saw the biggest drop of up to 80% in numbers from 1,466 units to 296 units in July 2013. We expect a more subdued private residential market ahead, with developers likely to be more nimble with pricing to avoid hitting buyers' resistance levels. We also foresee that many potential buyers will likely to be more cautious before making a purchase decision as they will have to take into account all the rules before buying a property,” explained Mr Mohamed Ismail.

The residential market still has genuine demand from local buyers and in particular, first-time home buyers with no major existing loans (and should low interest rates continue to prevail in the near term), transactions will continue to be healthy. This could be an opportune time for first time homebuyers or upgraders to enter the market if their finances are stable. The full year forecast for new private residential home sales will range between 17,000 and 18,000 units sold as we are likely to see August to have a projected sales figure of 700 to 800 (excluding ECs) new homes sold. We are expecting a rebound in the market from September onwards as homebuyers get used to the new property loan rules," concluded Mr Ismail.

END

For media enquiries, please contact:

Carolyn Goh
Corporate Communications and Marketing Manager
P & N Holdings Pte Ltd (holding company of PropNex Realty)
480 Lorong 6 Toa Payoh #10-01 HDB Hub East Wing Singapore 310480
DID : (65) 6829 6968 / 98287834 | Main : (65) 6820 8000 | Fax : (65) 6829 6600
www.PropNex.com



Our Services and Tools

PropNex Services and Tools View More


Milestones

PropNex Milestones View More


Management Team

PropNex Management Team View More