Hungry Ghost month fails to spook buyers

Updated 03:00 PM Sep 20, 2010
by Ephraim Seow Siew Lee

SINGAPORE - The Singapore housing market was well and alive during the Hungry Ghost Month as demand for new private homes continued to be strong in the month of August, with sales staying above the 1,000 level.

Latest figures from the Urban Redevelopment Authority revealed 1,248 units were sold last month, a 19-per-cent dip from the 1,549 sold in July.

In total, 1,326 units were launched in August with buyers snapping up 94 per cent of the new units launched.

Traditionally, demand for homes are more sluggish during the Hungry Ghost Month. The Government's package of anti-speculation measures, however, had come on the second-last day of August, meaning market watchers would have to wait another month before confirming its impact on market sentiment.

The strong sale was well beyond analyst expectations of 500 to 800 units and brought the number of new homes sold in the first eight months of this year to 11,210 units (corrected at 2:50PM, Sept 20).

"There is a lot of liquidity out there and a lack of financial investment alternatives with the low interest rates," said Ms Chua Chor Hoon, senior director of research at property consultancy DTZ.

She added many still see property as a safe haven, citing its potential for capital appreciation and rental yield of 3 to 3.5 per cent - higher than savings and housing loan rates.

The hottest development last month was The Greenwich at Yio Chu Kang and Seletar Road, which sold 207 units for a median price of $1,095 per square foot (psf). The units ranged from 616 square feet (sq ft) to 738 sq ft.

Viva Vista at South Buona Vista Road came in second as it sold 139 units of between 334 sq ft and 485 sq ft. at the median price of $1,509 psf.

"Their attraction lies in the affordable price quantum as well as proximity to major transport nodes," said Mr Li Hiaw Ho, executive director, CBRE Research.

Property consultancy Jones Lang LaSalle said the Core Central Region remained the quietest despite the 406 units launched by developers to stir up the market. Only 155 units from Core Central Region were sold there. This is much lower than the 1,093 units sold in both the Rest of Central Region and Outside Central Region.

Market experts said the latest URA figures showed escalating prices, where 88.2 per cent of units sold had a median per square foot price of over $1,000.

However, looking ahead, observers expect the recent cooling measures by the government to impact buying sentiments. Jones Lang LaSalle estimates September private home sales to contract 30 to 35 per cent on-month as the policy takes effect.

"Although the full quarter numbers have not been released, we estimate resale volume (for all residential properties excluding executive condominium) in the third quarter could decline by 20 to 25 per cent quarter-on-quarter or 25 to 35 per cent year-on-year," said Dr Chua Yang Liang, Head of Research South-east Asia at Jones Lang LaSalle.

Source: http://www.todayonline.com