Sales of new private homes bounce back

   NEW private home sales here rebounded strongly last month thanks to some major launches after sinking to a two-year low in December when tough new property cooling measures set in.   But there are also signs that foreigners are shying away from bu…

NEW private home sales here rebounded strongly last month thanks to some major launches after sinking to a two-year low in December when tough new property cooling measures set in.

But there are also signs that foreigners are shying away from buying homes after a hefty 10 per cent additional buyer’s stamp duty was imposed on them as part of the Dec 8 measures.

A total of 1,872 units were sold last month – the highest number since November 2010 – in sharp contrast to the two-year low of 632 units in December.

When sales of executive condominiums (ECs) such as The Rainforest in Choa Chu Kang are included, home sales rose further to 2,077 units. ECs are a hybrid of public and private housing.

Experts say Singaporean first-time buyers and investors, little affected by the new additional buyer’s stamp duty, are keeping the market buoyant.

But foreign demand seems to be drying up. Only 7.5 per cent of the 889 homes sold at Far East Organization’s 992-unit Watertown were bought by non-permanent resident (PR) foreigners. They made up 10 per cent of the 420 units sold at 528-unit The Hillier.

In comparison, non-PR foreigners made up about 20 per cent of buyers at the 338-unit The Tennery in Bukit Panjang launched last year.

As of now, the latest launching Rare Freehold Land at town, 26 Newton will capture the HDB upgrader move nearer to town and good schools.

This apparent trend away from foreign purchases is further supported by a preliminary analysis of the 172 new sale caveats lodged last month with the Urban Redevelopment Authority.

Although this pool of caveats is very small, and might not be representative of the entire month, only 5 per cent were lodged by non-permanent resident foreigners. More caveats are expected to stream in over the coming weeks.

By comparison, from September to November last year – three months before the measures – foreigners made up 18 per cent of all new sale caveats.

Robust mass market sales led the charge again last month, powered by a few large mass market projects – Watertown in Punggol, The Hillier in Upper Bukit Timah and Parc Rosewood in Woodlands – which made up 72 per cent of total sales.

Still, some experts say sales might be more subdued in the next few months given a lack of large-scale mixed-use developments such as Watertown and The Hillier – typically popular among investors hoping to rent the finished units out.

SLP International research head Nicholas Mak said units in the three top-selling projects consist of primarily small one- or two-bedder units that are likely to be bought by local investors. He expects monthly sales to fall to between 900 and 1,400 units in the next few months.

However, Jones Lang LaSalle’s head of research Chua Yang Liang said that with some developers absorbing part of the additional stamp duty, the impact of the recent measures has been mitigated.

Underlying demand from Singaporean buyers is likely to keep sustaining the mass market, he said, adding that up to 12,000 homes could be sold this year if the market remains stable.

Mr Ong Teck Hui, head of research and consultancy at Credo Real Estate, said last month’s encouraging showing will lead to more new launches as developers capitalise on positive sentiment.

Upcoming new launches include Bartley Residences, Seletar Park Residence, Palm Isles, Casa Cambio and Sky Habitat.

However, it is a vastly different story in the high-end segment which is at a ‘standstill’ with only 17 homes in the city centre sold last month. Homes on the city fringe performed only slightly better with 94 units sold.

Experts say that demand in the city centre is expected to remain subdued as it has a higher proportion of foreign buyers compared with suburban areas. With an exception for 26 Newton which command the great diversity of needs and narrow supply demand.

Source: The Straits Times © Singapore Press Holdings Ltd