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Uncertainty over the national housing policy in the wake of the recent Singapore General Election and buyers’ increasingly discerning attitude have caused both volume and prices of new private home sales in May to drop, compared with the preceding month.
Developers, sellers and buyers — if they are not already doing so — will henceforth be watching out for new housing policies that the government might introduce to cool the market, market watchers say.
“All ears will be tuned to an expected announcement by the government of housing policies on the demand side,” says Alan Cheong, associate director of research and consultancy at Savills (Singapore). On June 9, the government said it would be releasing enough land sites to build some 18,200 new private housing units in 2H2011.
Besides the wait-and-see attitude that many are now adopting, buyers have also become more price-sensitive, says Colliers International’s director of research and advisory, Chia Siew Chuin.
Still, some market analysts expect the new Minister for National Development, Khaw Boon Wan, to spend more time addressing the public housing market and leaving the private market alone for now. Chua Yang Liang, Jones Lang LaSalle’s head of research for Southeast Asia and Singapore, believes the current policies are already effective in cooling the market. Thus, further measures to cool the private market will be “small” for now, he says.
Data released by URA on June 15 shows that compared with April, sales of new private houses were down 13%, to 1,575 units. According to data provided by Savills, the median price for May averaged S$1,542 psf, down 1.2% from April, but still up 10.3% y-o-y.
Top-selling projects in May included MCL Land’s Terrasse, with 184 units sold at a median price of S$994 psf, and Wing Tai Holdings’ Foresque Residences, with 141 units taken up at S$1,108 psf. Other projects that moved in significant numbers were Hoi Hup Realty’s The Forester@Mount Faber, as well as newly released units from already-launched projects such as The Minton and Eight Courtyards. Developers launched a total of 1,215 units that month.
The most expensive transaction, at S$5,842 psf, was of a unit at The Marq on Paterson Hill, a project by SC Global. The transaction was also the highest since the market’s previous peak in 2007, when a penthouse at The Orchard Residences went for S$5,600 psf.
Collier International’s Chia expects buying to remain strong in June, buoyed by economic fundamentals and the ongoing low-interest-rate environment. Developers should not take this for granted, however, as buyers will be increasingly price-sensitive, selective and cautious, while waiting for clearer direction on possible policy changes from the government, she says.
However, she expects developers — especially those with weaker holding power — to continue rolling out new launches. “Some developers may prefer to test the market and launch in smaller batches in view of the mixed sentiment in the market,” says Chia, who estimates that more than 1,000 units will be launched in June. — The Edge Singapore
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 864, June 27-July 3, 2011
