The Hungry Ghost Festival, which falls between 31 July and 28 August, may come with its usual scares, but property developers face a more serious problem.
Even before the festival kicks off, various factors have already weighed down on private home buying response.
“The Ghosts’ Month will provide developers with a good excuse if sales slow down even further in the next few weeks,” said one property developer.
Colliers International’s analysis reveals that since 2007, sales of private homes dropped between 19 and 70 percent month-on-month during the Hungry Ghosts Month.
According to official data released by the Urban Redevelopment Authority (URA) last week, developers’ sales fell 25 percent month-on-month in June, compared to 12.7 percent month-on-month in May.
Market watchers believe that while the traditional Chinese may avoid buying homes during the Ghosts’ Month, the younger generation is less likely to observe this practice.
Property agents argue that when the real estate market is hot, the drop in sales during Ghosts’ Month tends to be less marked. However, when the market response is weak, the drop in sales becomes more evident.
“It’s an additional factor that will affect sentiment in a weak market,” said Chua Chor Hoon, Research Head of DTZ SE Asia.
Chua noted that among the factors which are already weighing down market response are economic uncertainty in Europe and the US, resistance to high prices, cautionary market remarks by the National Development Minister and vagueness about the impact of the increased supply of new HDB flats on the private home segment.
“Hopefully we’re not sailing into a perfect storm. Things have been quiet in the past few weeks. The market has come off a bit. In the past, when there were property cooling measures by the government, there was a knee-jerk reaction and after that, buying recovered. This was the case even with the last round of measures in January,” said one developer.
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