Singaporean developer DTZ expected home sales to remain weak in 2009 given the economic slowdown. The company said that the poor market condition would hold back consumers from buying real estate.
Home sales have decreased dramatically in the third quarter. Only 112 and 192 units were sold in October and November, respectively, compared to the monthly average of 444 from January to September. This was the lowest sales reported by the Urban Redevelopment Authority (URA) since June 2007. According to URA figures, of the 38,100 units sold in 2007, only 30% changed hand this year.
Prices of non-landed private residences suffered the most, falling by 14% on quarterly basis. The last two quarters saw non-landed home prices falling by 4.5% on average. Prices fell by 21.6% on yearly basis to $1,160 per sq. ft., the lowest level since the second quarter of 2007.
Prices of landed homes also dropped – albeit at lower rate – after staying unchanged in the third quarter of the year. Freehold prices dropped around 3.8%–5.7% from the third quarter.
Rents of non-landed homes in prime areas spiraled down as more foreigners left Singapore. As part of belt tightening, tenants were relocating from prime districts to suburbs, and some even downgraded to smaller units. Rents in prime districts fell by 9.4% on quarterly basis to $4.36/sq.ft
Despite low sales, DTZ Executive Director Margaret Thean believed that declining home prices and low housing rates may soon prompt some investors to enter the property market.