Private home sales fall to three-month low

Private home sales fall to three-month low
By Jonathan Peeris and Jo-ann Huang | Posted: 15 February 2011 1421 hrs

SINGAPORE: Sales of private residential property in Singapore fell to a three-month low in January after the government announced stringent measures to curb speculative activity, including a 16 per cent seller's stamp duty for sales in the first year.

Data released on Tuesday by the Urban Redevelopment Authority (URA) showed that 1,189 private homes were sold last month.

This is an 10.7 per cent month-on-month drop from the 1,332 units sold in the previous month. It is also the lowest monthly sales figure since October.

Analysts said the decline was expected as the new cooling measures have injected some caution into the property market.

"The immediate reaction then was that perhaps property prices might take a slight dip, so why not wait for a while and see how the market reacts. If the prices do come down, then they should invest when the market is cheaper," said Ku Swee Yong, CEO of International Property Advisor.

But mass market homes in the suburban areas are still the most popular.

Suburban properties chalked up the most sales with 588 units sold, while 200 units in the central area were sold last month.

As for city fringe areas, 401 units were sold.

In December, some suburban homes saw record-high prices of S$1,500 per square foot.

But the number of homes sold at such price levels fell 13 per cent last month.

"It does indicate that the cooling measures in January have some impact already because these people who are buying in the mass market category are probably now a little bit circumspect and re-examining their investment strategy," said Ku.

Despite the cooling measures, analysts said demand will remain strong going forward.

They expect home sales to hold steady in the next two to three months.

"Even though February only has 28 days with Chinese New Year for the first two weeks, close to 500 units were being sold. With another two weeks to go, more launches are expected. I do expect sales for February to exceed 1,000 units, and March and April will be healthy again," said Mohamed Ismail, CEO of PropNex.

Analysts said the full impact of the cooling measures will only be felt after March this year.

A total of 1,238 units were launched in January.

- CNA/fa/ls

- wong chee tat :)