Private home sales down in January but more units launched

Source : Channel NewsAsia - 16 Feb 2009

Private home sales further slowed in January, according to the latest Urban Redevelopment Authority (URA) figures. Some 107 deals were completed last month, compared to 131 in December.

Property agents said this was the lowest level recorded in the last two years - even lower than last October when global stock markets slumped.

Even so, developers placed more projects on the market, with 204 units released in January. This was slightly higher than the 157 private homes released a month earlier, which had been the lowest level since June 2007.

Despite these gloomy numbers, real estate agency Propnex Realty expects a brighter February. The firm said this is because there has been good take-up from some recent launches this month.

For instance, the new developments Alexis and Caspian had enjoyed strong take-up with over 750 units sold.

CEO of PropNex Realty, Mohamed Ismail, said: “February has been a good month and is likely to post a record number of transactions, far exceeding the peak of last year - close to 800 over units.” This will be about eight times the number sold in January.

According to property consultant Colliers, potential buyers would have been waiting for the Budget announcement before making any purchase, and were also occupied with preparing for the Lunar New Year.

But while sales were seen picking up, analysts said one trend would likely persist throughout the year.

Director of consultancy and research at Knight Frank, Nicholas Mak, said: “Most units launched and sold by developers last month were in the suburban areas. Launch and sales activities by developers in the prime district almost came to a halt. Less than 10 units were transacted.”

Mohamed Ismail said: “The appetite for many consumers today is when the property price, the overall quantum is less than S$800,000. There are many people willing to buy.

“Not only from the perspective of consumers, even financial institutions and the banks are very comfortable to lend to people for property that are below a million because the risk and spread for the bank is so much better.”

Thus analysts expect most upcoming launches to fall under this category. They said developers may ride the new wave of sales and launch more units in the second half of February.

They said as many as 1,000 units may be launched next month, a level not seen since July 2008.

And to support sales, analysts said that going forward, developers are likely to work with banks on financing schemes. For example, two recent developments launched - Alexis and Caspian - have interest-absorption schemes.