Just before the cooling measures on Dec 7 changed the property landscape, private home sales had spiked sharply in November, the latest numbers released by the Urban Redevelopment Authority (URA) shows. But the immediate future looks starkly different, as consultants expect sales to slow by 20 to 30%.
Buyers snapped up 1,701 private homes in November, excluding executive condominiums (ECs) - a 22.3% increase from October's 1,391 units.
Including ECs, 1,854 homes were sold, compared to 1,642 in October. This translates to 153 ECs being sold in November. (*shouldn't the Nov EC sales be 212?!)
The cooling measures have changed the equation.
Png Poh Soon, director, consultancy and research at Knight Frank, says that excluding executive condominiums (ECs), sales could fall to some 1,000 units or fewer per month. After Chinese New Year, this could rise moderately to between 1,100 to 1,200 units he said.
ERA key executive officer, Eugene Lim agreed. "We expect the market to take a breather in December and January as developers and buyers take stock of the recent changes... We can expect slower sales by about 20 to 30% over this festive period," he noted.
Added PropNex Realty chief executive Mohamed Ismail: "It will be interesting to see the results of private property sales from December onwards, especially after the ABSD (additional buyer's stamp duty) has taken effect."
On Dec 7, the government announced a series of cooling measures, which included an additional 10% stamp duty for foreign buyers.
According to Chia Siew Chuin, director of research and advisory, at Colliers International, these measures could result in an initial knee-jerk reaction in the market. That, coupled with potential homebuyers who may be sidelined during the year-end school holiday and festive season, is likely to put a cap on demand in December.
In the first 11 months of the year, developers had sold 15,393 private homes (excluding ECs), and 2,855 ECs. For the whole of last year, developers sold 16,292 private homes and 1,052 ECs.
The slowdown in December could mean that the total sale of private homes in the primary market may now be close to last year's level - instead of easily surpassing it.
Taking into account the economic outlook and likely effects of the new measure, take-up for new homes sales in 2012 could potentially fall between 9,000 to 11,000 units, said Ms Chia.
Alan Cheong, associate director or Savills Research and consultancy added: : Transaction volumes should be tepid in the light of a standoff between local buyers who think they can get a better deal and developers who have the financial strength to stay put."
Dennis Wee Group's senior manager in research and consultancy, Lee Sze Teck, added: "It could be till February that we will see the full effect of the ABSD. Most developers are adopting a wait and see approach before deciding whether to offer relief package to offset the ABSD."
According to CBRE, prices of luxury/prime residential properties could fall by 10 to 15% in 2012, whereas mass-market homes could fall by 5 - 10%. Landed home prices will likely see a smaller correction of less than 5% since foreigners are generally not allowed to buy and supply is limited.
"However, we are of the opinion that these measures are unlikely to be a permanent feature because of the nature of Singapore's highly open economy," CBRE added.
Savills' Mr Cheong added: "Property prices were already moderating before these cooling measures were announced. In the face of global uncertainties, these measures came as a surprise, not in terms of timing, but in the form."
The market had looked quite hot before the measures were announced. Top sellers in November included Bedok Residences (477 units sold at $1,359psf median price), The Palette (367 units sold at $895psf median price), Parc Vera (83 units at $825psf median price).
One of the drivers pushing sales was the supply of new units in the market, say consultants; in a move to launch projects before the year-end holiday period, developers released a total of 1,979 units for sale, a month-to-month increase of 47.9%.
This marks the second highest launch and sales volume this year, after April's 2,055 units launched and 1,805 sold, said Colliers' Ms Chia.
The Outside Central Region (OCR) - where suburban mass-market condominiums are located - dominated November's launch and sale figures. Sales in the OCR jumped 49% month-on-month in November to 1,328 units, or 78.1% of all units sold.
This is also the highest monthly sales in the region, since July 2009.
New launches were also up, helping drive new demand, with 1,518 new units launched to the (OCR) market in November, an increase of some 123% compared to October, pointed out Chua Yang Liang, from Jones Lang LaSalle.
Colliers International's analysis showed that about 37% of the 1,701 homes sold by developers were priced at $1,000psf or less. More than half of the transactions (about 52%) fell between $1,000 and $1,500psf.
Source: The Business Times
The wife and I were reminded by the fact that last year's total private home sales of 16,292 units was a record. So given the slew of cooling measures announced by the Government (SSD, ABSD etc) so far this year and the poorer global economic situation compared to last year, the property market (15,393 units as of November) has done spectacularly well year to date.