Sales of new property surges downward in Singapore, latest monthly figures show

 
Sales were down 22% from May and 62% below April. It is the first dent in an exceptionally strong first half for the country’s real estate market.
   
Sales had started slowing in May as the Euro debt crisis and high prices made buyers think twice, according to analysts, but they expect sales to pick up again in July.
 
‘The momentum of new home sales slowed down in June as expected,’ said CBRE Research executive director Li Hiaw Ho.
 
According to flash estimates from the Urban Redevelopment Authority (URA) two weeks ago, the private residential property prices index hit a new high in the second quarter, past the pre-Asian financial crisis peak.
 
Buying activity was concentrated in the suburbs, reflecting market caution. Home hunters bought 429 homes in the outside central region, accounting for 51% of total sales. These included 77 units from Waterfront Gold at Bedok, which made its debut in June. In the rest of central region, developers sold 275 units or 32% of the total. Activity was quietest in the core central region with 143 units or 17% sold.
 
Property consultants believe developers may sell slightly more homes this month, with the World Cup and school holidays over. According to DTZ executive director Ong Choon Fah strong economic growth in the second quarter could boost market sentiment. On Wednesday, the government revised its GDP growth forecast for the year to a range of 13 to 15%, up from 7 to 9%.
   
But, while the market could get better in July, few consultants expect buying activity in the coming months to revisit highs reached earlier in the year. ‘Buying interest will remain selective, depending on the location and product attributes as well as price points of new launches,’ said Li.
 
Price resistance could keep some buyers on the sidelines. ‘Bargain hunting is likely to be the main focus of buyers,’ said Chua Yang Liang, South-east Asia and Singapore research head at Jones Lang LaSalle.
 
To some extent, home sales are driven by the number of property launches, according to Ong. She expects launches in the mass market to continue because developers who recently won tenders for state land may want to roll out their projects before more government sites and more competition come on stream.
 
But developers of prime freehold projects could hold back launches because there have been fewer collective sales of such sites. They may consider waiting for a little while more when they have a bit more pricing power, added Ong.