The private residential property market in Singapore cooled significantly last month, with the total caveats lodged dropping 41 percent on-month to 1,979, according to the latest figures released by the Singapore Institute of Surveyors and Valuers.
Still, several property analysts are not expecting foreign investor’s appetite for home units to be dampened.
Industry data indicated that district 4, which includes Telok Blangah, Keppel Bay and Sentosa areas, saw a 76 percent decline, the biggest drop in caveat numbers, while districts 1 and 2 (Marina Bay and Shenton Way) also fell by as much as 75 percent.
Caveat numbers in all districts across the country dropped on-month, ranging from 57 percent for the Orchard area to a 24-percent drop for District 5 at Pasir Panjang and West Coast.
Several analysts attributed last month’s steep drop in sales to fewer new launches by developers. They said that homebuyers were also holding back their purchases, while waiting for prices to fall.
"A lot of buyers today feel that prices are too high so there’s no need to buy. So when the buyer takes a wait-and-see attitude, that’s when the number of transactions come down," said Chris Koh, director of Dennis Wee Group. "Those who wanted to buy would have bought during the last one year when they saw prices escalating and they want to jump in and buy."
Coupled with the World Cup event in South Africa, market observers expect caveats for July and August to stay at up to 2,400 units a month. That is about 21 percent down from the 3,053 caveats lodged three months ago.
Despite the caution in the real estate market, Sentosa Cove made the headlines recently after a bungalow was purchased at a record of S$36 million ($2,400 psf) by a Chinese national.
Industry players are not expecting the cooling sales volumes to affect the demand for high-end properties such as Sentosa Cove.
Mohamed Ismail, PropNex CEO, said: "In fact, a neighbouring property at Sentosa went above 2,300 per square foot. In other words, there are real investors willing to put their money to invest in Singapore. Because they do believe in the long-term appreciation of the property."
According to PropNex, the current cost of landed properties in Sentosa is nearly S$2,000 psf on average. However, the company expects prices to drop to S$1,800 to S$2,000 psf due to the World Cup fever.