Private homes sales plunged for the previous month with only 131 new private units sold, down from the 193 units sold last November. The fall capped the toughest year for the new sales all over the island since 1990.
The previous year only had 4,287 units sold, which had been a remarkable drop from 2007, when there was a track record of 14,811 private units changed hands. However, looking on the brighter side, the fall was still quite better compared to the 1990 drop, where there was only 2,526 new private homes sold.
The market’s miserable performance seemed to have also affected the developers, who had only opened 157 new private units last December, said the Urban Redevelopment Authority (URA) the previous day. This was even worse than the 174 launched units way back in October, as the intensifying global crisis shocked the majority of sellers and buyers.
Last year, total launches were only 6,114 units – down by 56 percent from 2007’s record of 14,016 units, the Colliers International said. Furthermore, there has also been a drop in resale deals, from 2007’s 20,985 units to around 7,400–7,600 units. Sub-sale deals plummeted to around 1,600–1,650 homes the previous year from 2007’s 4,863 units, as indicated by Research estimates of CBRE.
However, in spite of the terrible sales figures, property prices remain solid.
Nicholas Mak, Knight Frank’s director (research and consultancy), said, “Developers generally withhold project launches to monitor the market situation, instead of resorting to drastic measures to reduce prices”. Mister Mak also said that due to the restrained economic conditions, home buyers are now becoming more realistic, checking first the functionality before embellishments.
The increase in the URA price index in Q2 2004 reversed its direction from Q3 2008, dropping by 2.4 percent. Dr. Chua Yang Liang, South-east Asia research head of Jones Lang LaSalle, estimates that it would shrink further by 5–7 percent in the current quarter due to the ineffective take-up rates. Experts said that buying interest is supposed to get better as prices drop further.
“Should more projects be attractively re-priced in 2009, the number of units launched and take-up can expect to sustain or marginally improve, as there is some latent demand from bargain hunters,” Mr. Mak said.
Li Hiaw Ho, Research executive director of CBRE, added, “The continued moderation of prices should kick-start some level of activity to the market.” New homes sales for the current year are projected to pick up to approximately 5,000–6,000 units, said Mr. Li.
Yet, improvement may take some time. Tay Huey Ying, Colliers International’s director (research and advisory), said that fewer launches for this month may be probable due to hesitant developers, who are anticipating some goodies in the next Budget for Thursday.
Miss Tay added that several potential buyers are in preparation for the Chinese New Year, thus a new low is again expected this month. On top of that, property consultants also anticipate that the entire Q1 or this year’s first half will endure slow sales as banks and the economy tighten credit.
The Newton Edge in Makeway Avenue, consisting of 104 units, was the previous month’s leading-seller with 43 units sold at an average price of $1,200 psf.