Home buying demand for the second half of the year could slow, according to market watchers.
They said that is mainly because a large portion of pent-up demand has already been satisfied.
With six new land plots for executive condominium (EC) development up for tender later this year, analysts said prices for mass market homes may also fall.
Lim Yong Hua and his family have been looking for a new home since early this year.
And last weekend, he bought an EC unit at 1 Canberra in Yishun for over S$900,000.
Mr Lim said: “I have one HDB house, so I bought an EC and I will sell away my HDB house; the profit in between, the income, we will make payment for the EC.”
Between January and May 2012, 2,100 units of new ECs have been sold, according to the Urban Redevelopment Authority. And analysts said majority of the buyers are those upgrading from public housing flats.
HDB resale prices have risen by over 80 per cent in the last five years and some analysts said that will provide ample liquidity for homeowners to buy private residential properties.
Developer of 1 Canberra, MCC Land, said the showflats have not been as crowded lately.
But the demand for ECs is likely to remain fairly stable.
To that end, the government is slated to release six EC sites for tender in the next few months.
Richard Nah, senior manager at MCC Land Singapore, said: “The developers would have taken note of the sentiment on the ground, so we will be circumspect in terms of our bid. We have to look at the current benchmark, in other words what is the current pricing of the ECs within that locale or even slightly beyond.”
Donald Han, special advisor at HSR, said: “The window for EC launches this year will probably remain good for developers. I suspect land prices may come off slightly in terms of price per square foot per plot ratio, compared to what earlier tenders have been in the vicinity, let’s say in the last six to eight months ago.”
Some property analysts said the new land supply for the second half of 2012, which can yield 3,100 EC units, could put pressure on developers of mass market projects.
Mohamed Ismail, CEO of PropNex, said: “If they over price it, Singaporeans will have an alternative property purchase in the form of an executive condominium. If the per square foot of the prices of mass market, the minute it exceeds S$1,200, there is already a form of resistance from many buyers.”
With an increase in land supply, PropNex expects a 5 per cent downward adjustment in prices for the mass market home segment in the second half of the year.
Source : CNA – 2012 Jun 19
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