New private home sales down 31.6% in May

Sales of new private homes, excluding executive condominiums (ECs), declined 31.6 per cent in May, after recording strong sales in the first four months of the year.

But analysts have said it is too early to confirm that the market is in a downtrend.

Flo Residences and Palm Isles were some of the best selling developments in May.

They contributed to the number of private homes sold in May – totalling 1,702.

Two hundred and sixty-six units were sold at Flo Residences, 200 units at Seahill, 192 units at Eight Riversuites, 48 units at Archipelago, and 48 units at Palm Isles.

Latest data from the Urban Redevelopment Authority (URA) also showed that 1,205 new homes were sold in the suburbs or Outside Central Region.

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

Sales volume fell across all three market segments, marking the lowest sales volume achieved this year.

Eugene Lim, key executive officer at ERA, said: “We cannot interpret that this month’s dip in sales will mean that the market is on the decline. I think the market is taking a breather because we had three to four months of blistering pace in new home sales.

“The supply is there for developers to roll out. And they are mindful of the demand take-up. Most developers will be pricing their units very sensibly to move sales. ”

Some analysts said in the event of a Greek exit from the eurozone, Singapore’s property market would make a quick recovery after the first few months of initial jitters, as investors are still looking to Singapore as a a safe haven for their assets.

Getty Goh, director at Ascendant Assets, said: “Right now, the banking system is holding about S$150 billion worth of savings and deposits. In comparison to during the Asian Financial Crisis, the banking system only had about S$50 billion.

“So because of this huge liquidity, we do not expect prices to come down. What we do expect is for prices to stabilise and in fact, creep up. We would say creep up by 3-5 per cent. ”

Analysts said sales in May are still well above the historical average of 1,300 units every month.

They added that speculation on possible cooling measures targeting shoebox units partly caused home investors to hold back their purchases.

Only 13.2 per cent of new home sales in May are shoebox units – a sharp decline from the 27 per cent reported in the first quarter of this year.

Source : CNA – 2012 Jun 15