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Singapore New Private Home Sales Decline in May

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by Ernie B. Calucag

Lesser number of private home units was sold in Singapore last month, following strong sales in the first four months of the year.

According to data released Friday by the Urban Redevelopment Authority (URA), 1,702 new private residential units, excluding executive condominiums (ECs), were sold in May, down 32 per cent from 2,487 in April.

Including executive condominiums, a category of apartments reserved mainly for Singaporeans, May’s sales totalled 2,057 units, down from 2,660 the previous month.

“The lower sales could be attributed to there being no major launch of commercial-residential projects in the likes of Watertown, The Hillier and Katong Regency,” said Li Hiaw Ho, Executive Director at CBRE.

Year-to-date, a total of 10,724 units were sold compared to the same period in 2011 which saw only 7,059 new homes sold.

“The sales momentum in 2012 so far has been remarkable. It is foreseeable that some 12,000 units will be sold by the end of June, which is more than the 11,147 new homes sold in the whole of 2006,” noted Li.

URA said 1,205 new homes were sold in the suburbs, or Outside Central Region, in May.

Meanwhile, 362 new homes were sold in the city fringes, or Rest of Central Region (RCR), and 135 units were sold in the city, or Core Central Region (CCR).

Since 3Q2011, the quarterly sales volume in OCR made up more than 70 per cent of the total sales volume while that of CCR has fallen below 10 per cent.

CBRE’s Li said the higher OCR sales volume is mainly due to the higher supply since developers acquired a good number of sites from the government land sales programme in 2010 and 2011.

On the other hand, he noted that the low sales volume in CCR could be attributed to affordability issue since they are more expensive, as well as the impact of recent property measures such as sellers’ stamp duty (SSD) and additional buyer’s stamp duty (ABSD) which put off some potential investors and foreign buyers.

“However, it is possible that CCR sales will see an improvement in 2H2012 since developers are stepping up efforts to dispose unsold units from completed projects and those that are nearing completion,” Li said.

“Going forward, there are early signs that new home sales momentum is slowing down due to changing external circumstances. As such, we do not expect the sales volume in 2H2012 to be as high as 1H2012.”