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Thread: Private home sales seen falling 25% next year

  1. #1
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    Default Private home sales seen falling 25% next year

    [url]http://www.businesstimes.com.sg/premium/singapore/private-home-sales-seen-falling-25-next-year-20121212[/url]

    Published December 12, 2012

    [B][SIZE="5"]Private home sales seen falling 25% next year[/SIZE][/B]

    [B]Savills cites local buying fatigue and increasing home completions[/B]

    By zeinab yusuf saiwalla


    SALES in the private residential market could fall by more than 25 per cent next year, as a result of local buying fatigue from the many new launches over the past years and increasing home completions, according to a report by Savills Research Singapore.

    This would mean that from the record breaking 20,000 units sold in the past 10 months of this year, transaction numbers are likely to hover between 16,000 and 18,000 next year.

    Prices, however, are expected to continue their upward trend, in line with rising land costs and demand from overseas investors.

    According to Savills data, the average unit price of luxury condos in Singapore posted a second quarterly rise of 2 per cent quarter on quarter (q-o-q) from $2,350 per square foot (psf) to $2,395 psf in the fourth quarter of 2012.

    For the full year of 2012, luxury condo prices have risen 5 per cent from $2,286 psf in Q4 2011, but are still 4 per cent lower than the peak price of $2,495 psf in Q4 2007.

    Given the rising trend, market analysts expect a price increase of about 10 to 15 per cent for mass-market non-landed properties, while luxury properties may rise by about 3-5 per cent.

    "Sharply rising land costs, strong developer balance sheets and low interest rates should all conspire to make 2013 another halcyon year for the industry," said Savills Singapore research head Alan Cheong.

    The report also highlighted that quantitative easing in the United States could see liquidity flowing into Asian economies such as Singapore in search of a safe haven and currency appreciation. Coupled with rock-bottom interest rates that are likely to remain low next year, some fresh external demand can hence be anticipated.

    Although an influx of new demand can be expected, the purchases made by overseas buyers are likely to be kept at modest levels, owing to the Additional Buyer's Stamp Duty (ABSD).

    The percentage of purchases made by non-permanent residents remained low at 7 per cent in Q3 this year and 6 per cent in the first half of Q4.

    This was significantly lower than the 20 per cent recorded in Q4 last year, before the implementation of the ABSD.

    Additionally, the strong affinity towards executive condominium (EC) developments is likely to continue given the confident sentiments among EC buyers.

    Close to 3,500 EC units were snapped up in the first 10 months of this year and this number is expected to reach 4,000 once three more EC developments - [email protected], The Topiary and Forestville - are launched before the year ends.

    This will surpass the 3,935 ECs sold in 2010 and 2011 combined.

    The report also noted that demand for shoebox units declined in the fourth quarter of this year to a low of 7 per cent from its three-year peak of 21 per cent in the third quarter of 2011, a possible result of government curbs.

    Although these new measures, which require developers to build homes with a prescribed average unit size of between 500 sq ft and 700 sq ft, will curb the growing number of shoebox units, it could in turn heighten the median prices of these small-format homes.

    Prices of shoebox condos sized below 500 sq ft have already risen for three consecutive quarters to a high of $1,474 psf in Q4 this year. This translates to increases of 6 per cent q-o-q and 10 per cent y-o-y.

  2. #2
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    I'm waiting.... strum fingers
    When you have eliminate the impossible, whatever remains, however improbable, must be the truth

  3. #3
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    Quote Originally Posted by sherlock
    I'm waiting.... strum fingers
    Sales falling is different from price falling. ECs sales and prices should be climbing next year.

  4. #4
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    Quote Originally Posted by hyenergix
    Sales falling is different from price falling. ECs sales and prices should be climbing next year.
    Agree. While the analysts have been forecasting drop in sales volume and prices over the past few years, 2012 has been gravity-defying and we have seen higher volume than 2011 despite all the CMs and it does not seem to be abating, as least for now.
    When you have eliminate the impossible, whatever remains, however improbable, must be the truth

  5. #5
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    Quote Originally Posted by reporter2
    [url]http://www.businesstimes.com.sg/premium/singapore/private-home-sales-seen-falling-25-next-year-20121212[/url]

    Published December 12, 2012

    [B][SIZE="5"]Private home sales seen falling 25% next year[/SIZE][/B]

    [B]Savills cites local buying fatigue and increasing home completions[/B]

    By zeinab yusuf saiwalla

    Prices, however, are expected to continue their upward trend, in line with rising land costs and demand from overseas investors.
    Volume down, prices still up hor....

  6. #6
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    it's actually a road of no return for Obi-wan ... He will just release more and more land ... If he do the about turn, the situation might just get worst but get it wrong and prices might just crash w oversupply. A delicate situation imo ...

  7. #7
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    I think analysts who write such articles should be responsible. Just like those who say property prices will fall 30% in 2012 because of the 10% ABSD.

    If we allow analysts to just blurt such forecasts, then we will have a lot of Ah B around! I propose analysts who make forecasts have to publish letter of apologies explaining why their forecasts Re wrong if proven so in future.

    So that we know which analysts have been apologizing all the time.

    How can on the same day got analysts say up 10% and another say down 25%?

    Those analysts who shout big numbers to get attention must pay a morale price!

    DKSG

  8. #8
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    Quote Originally Posted by bakasa2002
    it's actually a road of no return for Obi-wan ... He will just release more and more land ... If he do the about turn, the situation might just get worst but get it wrong and prices might just crash w oversupply. A delicate situation imo ...
    Check this out
    [url]http://www.ura.gov.sg/sales/GLS-URA.html[/url]

    1. there is a minimum bid to the land price....
    2. Too much land, the developers will not bite....
    3. You have seen cases of land bidding rejected...

    What will be interesting is the population stats for end 2012 and compare it with 3rd quarter results recently published.

  9. #9
    东方

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    Watching this bery closely. Gonna get sexciting....


  10. #10
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    How would price fall? Every parcel of land they bid is getting more & more costly. ultimately, the cost will will be transfer to the consumers. the cooling measure govt kick in is to deter anti spec. have u every think that those who have hold on to their properties have make $$$?
    For details, please visit [URL="http://www.seanseeproperty.com"]properties in singapore[/URL]

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