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New private home sales rose M-o-M despite dampening effects of loan curbs and ghost festival
Singapore Property Market News and Analysis


Latest Property Real Estate News - Published on 16/09/2013

New private home sales remained healthy as developers sold 742 private homes, excluding executive condominiums (ECs) in August 2013, up 54% from the 481 units sold in July. Including ECs, which are a public-private housing hybrid, developers found buyers for 1,468 homes, reflecting a massive rise of 147.5% from the July’s figure of 593 units.

“The sustained buying activity for a typically quiet month shows that buying confidence in property generally remains healthy. Nevertheless, home buyers and investors have turned more cautious and have been more selective due to the cumulative effect of all the property curbs over the past few years," explained Mr Mohd Ismail, CEO of PropNex Realty. We believe the Total Debt Servicing Ratio (TDSR) – introduced on June 29 is the main reason for the tepid demand in both July and August. The TDSR has reduced the purchasing power of some buyers and also slowed the purchasing process as loan assessments by banks take a longer time so buyers are unable to commit to purchases as quickly as before. Demand would have also softened due to the TDSR’s impact especially on buyers who already have other existing mortgages. In addition, August is also the traditional Chinese Hungry Ghost month in which developers are not in a hurry to launch many projects.”

All 5 top selling projects are from OCR - with ECs popular

All best-selling projects were from the OCR namely; Ecopolitan, Lush Acres, The Tembusu, Kensington Square and Newest. Ecopolitan sold 335 units at a median price of $7903psf, Lush Acres moved 311 units at $790psf. The Tembusu found buyers for 218 units at $1,547psf; Kensington Square sold 61 units at $1,511psf, whereas Newest sold 18 units each at median prices of $961psf respectively. In all, mass market homes in the OCR contributed over 73% of sales in the month due to their more budget friendly launch prices compared to other regions (excluding ECs).

“With the tighter loan curb, first time home buyers and upgraders are expected to contribute to the bulk of the sales volumes as they generally do not have other debts and should have no difficulties in securing the full 80% bank loan. We believe the emphasis will continue to be on mass market homes and ECs in the OCR as they are more budget friendly,” continues Mr Mohd Ismail, “and as affordability is hit, existing home owners who still want to invest in real estate might also turn to smaller homes with lower quantum. As a result, we also expect sales of smaller homes to be popular.”

Muted sales volume to continue until year end

“The current low transaction volume can be attributed to developers holding back new launches and buyers re-assessing their affordability in light of the new TDSR framework. However, buyers' appetite for reasonably priced projects at good locations is still very strong. The latest project The Tembusu—a freehold project that sold over 200 units on the first day of its launch is testament to that."

“Nevertheless, home buyers and investors will continue to remain more cautious and will be more selective with projects, and we do expect the current slower sales to continue until the end of the year as many would-be homebuyers are still sorting out their finances to work within the TDSR limits. We also foresee that some potential buyers will continue to adopt a wait-and-see attitude before making a purchase decision as they will have to take into account all the previous rules before buying a property.”

“We expect the monthly transaction volume of new private homes to be about 700 to 800 per month, to reach between 14,000 to 16,000 units for the entire 2013,” concluded Mr Mohd 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



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