A double whammy of tough loan rules and no launches in the Hungry Ghost month belted new home sales last month, but analysts predict a turnaround when more units are released in the coming weeks.
Only 432 new private homes were moved last month – the lowest since the meagre 259 sales recorded in December last year, which had been a five-year low. This excludes sales at executive condominiums (ECs).
Last month’s total was also 15 per cent down on the 509 sold in July, according to Urban Redevelopment Authority data yesterday.
Buyers had little to entice them into the market last month with no projects launched, although there were 351 new units released from developments launched previously.
“The decline of sales goes hand in hand with the decrease in newly launched units in August, which was mainly due to the subdued sentiment created by the annual Hungry Ghost Festival,” said OrangeTee research head Christine Li.
What sales there were in August were largely in the suburbs.
The top-selling project was The Panorama in Ang Mo Kio Avenue 2, launched in January. There were 40 units sold at a median price of $1,249 per sq ft (psf).
Other popular projects included Coco Palms in Pasir Ris Grove, with 23 units sold at a median price of $1,046 psf, and Eight Riversuites in Whampoa East, with 22 sales at $1,345 psf. Coco Palms was launched in May and Eight Riversuites in May 2012.
The sales lift at projects that have been on the market for some time could be due to developers relaunching at lower prices or with enhanced offerings, said Knight Frank research head Alice Tan.
Sales at The Panorama, for example, have been consistently good since it was relaunched at lower median prices in May.
It sold 100 units that month, 49 in June and a further 23 in July after selling none in April.
Increased incentives to marketing agents may also be spurring buyers, said SLP International research head Nicholas Mak.
Analysts expect sales to be more robust from this month, with new projects like Seventy St Patrick’s, Highline Residences and Marina One Residences expected to launch 800 to 900 units among them.
EC launches are also expected, with Bellewoods EC lined up for this month and Bellewaters EC next month.
The two launches follow an absence of new EC releases in the past eight months, said Mr Mak, who added: “Sales of the new EC launches are anticipated to be robust as the pent-up demand is met with pent-up supply.”
There may be more relaunches as well, said Chestertons managing director Donald Han.
He expects luxury condos like The Crest and Alex Residences to up their marketing game, given the “ground lost” to the 500-unit Highline Residences, which sold about 80 per cent of the first 160 units released last weekend.
But buying at new launches is likely to remain “fairly muted” due to the total debt servicing ratio (TDSR) framework and property cooling measures, said Ms Tan.
“Some developers whose projects are in the early planning stages could even be putting off launches until early next year,” she added.
The luxury segment will continue to be hit by “anaemic demand” with TDSR making it hard for potential buyers to get loans for higher value homes, said PropNex Realty chief executive Mohamed Ismail Gafoor.
Analysts predicted sales this year to range between 8,000 and 9,000. That would be the lowest since the 2008 financial crisis, when developers sold just 4,264 private homes, said Mr Mak.