Chart of the Day: Property investment sales fall

The drop was led by the 55.3% decline in private sector sales in the first quarter of 2012.

Colliers International said:

Total sales value sank by 45.9% to a nine-quarter low of $4.97 billion in the first three months of 2012 from the $9.18 billion garnered in the last three months of 2011. This came about as investors retreated to the sidelines amid an environment clouded by uncertainties spanning from global economic prospects to real estate development and investment policy changes such as the imposition of an Additional Buyer Stamp Duty (ABSD) for residential purchases and minimum unit size for certain industrial developments.

The steep fall in property investment sales in 1Q 2012 was led by the steep 55.3% dip in private sector sales to $2.78 billion from the $6.22 billion worth of deals closed in 4Q 2011. In the public sector, although sales faltered by 25.7% from the $2.96 billion accumulated in 4Q 2011, the $2.20 billion garnered in 1Q 2012 is a healthy sum considering it was amassed from the sale of just eight parcels from the Government Land Sales (GLS) programme or less than half of the 17 plots awarded in the previous quarter and a site designated for the development of a petrol station.

Private sector property investment sales, in turn, were dragged down by the 80.8% plunge in commercial deals to $621.68 million, from the $3.24 billion garnered in the preceding quarter. The absence of mega deals such as the $2.01 billion sale of an 87.5% stake in Ocean Financial Centre from Keppel Land Limited to K-REIT Asia seen in the last quarter was a key factor contributing to this free-fall in private sector commercial sales.