Weakness in the Singapore private new home market is evident again in the low 418 units launched and 482 units sold in June 2014, said real estate agency JLL. These numbers are only a fraction of the 1,819 and 1,488 units launched and sold in May respectively.
The weak launch number shows that developers are not confident of launching new projects, seeing the slow sales progress of so many projects after initial launch.
For example, in May, Commonwealth Towers sold 275 units, Kallang Riverside 96 units and Waterfront @ Faber 81 units. In June, their sales status was 296, 97 and 89 units respectively, reflecting a significant slowing in sales after initial launch.
In June 2014, only two new projects were launched for sale – The Crest and Trilive. The Crest launched 132 of its 469 units and managed to sell 35 at a median price at $1,682 psf, while Trilive placed 80 of its 222 units onto the market and found buyers for 19 units at a median price of $1,605 psf. The relatively firm pricing for these projects is likely to have contributed to their slower sales.
The top seller in June was Coco Palms with 55 units taken up at a median price of $1,014 psf followed by The Panorama which disposed of 49 units at a median price of $1,287 psf. Coco Palms has sold 635 of its 944 units while The Panorama has moved 202 units of its 698 units since reducing prices. Favourable pricing perceptions in these projects have enabled them to make progress in their sales after initial launch.
In the first half of 2014, developers sold 4,476 private homes, a 10 percent decline from the 4,998 units sold in 2H13 and 55 percent drop from the 9,950 units taken up in 1H13. This shows the severity of the slowdown since the TDSR framework was imposed in June 2013.
Based on the above trend, private new home sales could be headed for an annual take up of 8,000 to 9,000 units in 2014, which is a 45 to 50 percent decline from the average new home transaction volume of the past five years.
Ong Teck Hui, National Director of Research & Consultancy at JLL, said: “After a robust showing in May, the private new home market has gone flaccid again. The fundamental weakness in demand due to the TDSR and other cooling measures prevents any market pick up from being sustained.
“After TDSR there is just not enough demand to continually soak up unsold units so we are seeing sales progress slowing significantly or even stalling completely after initial launch.”
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Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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