Market turmoil, ghosts scare S’pore home buyers

Source : Business Times - 15 Sep 2008

Private home sales in Singapore slumped 81 per cent in August from a year ago, to the lowest level since March as a combination of global financial turmoil and a traditionally unlucky month spooked buyers.

Sales of new residential projects, comprising both houses and apartments, fell to 320 units from 1,723 units sold in August last year, and sales were also down 64 per cent from the 901 units taken up in July 2008, government data showed on Monday.

The Hungry Ghost or Seventh Lunar month, falling in August this year, is widely deemed by the Chinese as an unlucky period for homebuying, although many Singaporeans have ignored the taboo in past years during property booms. ‘We can blame the ghosts partly, but I think it’s more that all this bad news about global banks is creating a real sense of anxiety among homebuyers,’ said Colin Tan, Singapore-based head of research for property consultancy Chesterton International.

Singapore’s financial services and export-dependent manufacturing sectors could be hit by global financial turmoil, with US investment bank Lehman Brothers filing for bankruptcy protection on Monday.

Worries over Singapore’s economic outlook have ended a four-year housing boom in the republic, as price growth for private homes slowed sharply in the April-June period, rising just 0.2 per cent in the quarter.

But Mr Tan expected home prices to remain steady in the July-September quarter, as developers hold out for better offers in the hope that market conditions will improve.

Developers put up fewer new projects for sale in August, with just 194 units launched compared to 1,885 units a year ago.

Concerns about the health of Singapore’s property sector has prompted analysts to slash share price targets for developers such as CapitaLand, Keppel Land and City Developments.