http://www.reuters.com/article/singa...-idUSL4N1972CG

Markets | Wed Jun 15, 2016 2:46am EDT

UPDATE 1-Singapore May home sales hit 10-month high, but outlook cloudy


Singapore's private home sales hit a 10-month high in May helped by new project launches, but the outlook is clouded by a weak economy that is likely to keep potential home buyers cautious.

Developers sold 1,056 units in May, up 64.2 percent from the same period last year, the Urban Redevelopment Authority. The sales volume was also the highest since July 2015, when developers sold 1,655 units.

Two newly launched projects helped push up sales, analysts said, while adding that the pick-up was unlikely to be sustained in coming months.

The temperature of the property market is "lukewarm", said Song Seng Wun, an economist for CIMB Private Banking.

"Buyers are not rushing back. Buyers are selective... So it will be a choppy kind of a market where some projects will do better than others," Song said.

On a month-on-month basis, private home sales rose 41.2 percent from April.

"The prevailing sentiment is still fairly subdued due to economic uncertainties," said Alice Tan, head of consultancy and research at Knight Frank Singapore.

Sluggish global growth and China's slowdown have dragged on Singapore's trade-reliant economy. In late May, the government slashed its export forecasts for this year after the economy barely grew in the first quarter.

Private home sales could be held back this year given the limited number of projects that are slated for launch in the later half of 2016, after the government tapered back on a government land sales programme over the past two years, Tan said.

"I think for the whole year new sales volume will be largely the same as last year or even slightly lower at 7,000 to 7,500 units," Tan said.

Separate data on Wednesday showed retail sales rose 3.8 percent in April from a year earlier and 1.1 percent on-month.

Singapore's reputation as a shoppers' paradise, which saw investors pour S$10 billion ($7.25 billion) into retail developments here in the past five years, is taking a pummelling because of weakness in the economy and a drop in spending by tourists.

(Reporting by Masayuki Kitano; Editing by Sam Holmes and Kim Coghill)