New home sales plunged 37% in Q3 as frugal buyers snub weary developers

Launches also dipped by 60.9%.

Residential developers’ woes intensified in Q3 as the number of new home sales plunged 37% year-on-year, while the number of new launches dipped 60.9% in the same period. There were 1,531 new units sold and 1,294 new units launched in the third quarter.

According to Knight Frank, the sharp drop in new units launched for the third quarter is mainly contributed by the current muted market sentiment with the onslaught of property cooling measures and the Total Debt Servicing Ratio (TDSR) ruling.

“As prospective homebuyers continued to adopt a “wait-and-see” approach in their property investment decisions, developers are holding back launches to monitor for medium-term improvements in the market situation. Such delay in launches is likely to prevail until at least 1Q 2015, especially for residential land parcels bought in 2H 2013 GLS programme,” noted Knight Frank.

Here’s more from Knight Frank:

Developers launched a total of 6,101 units in the past nine months in 2014. Over the same period 5,940 new units were sold, or a monthly average of 660 units per month.

On a quarterly basis, the number of new private landed and non-landed residential unit launches (excluding Executive Condominiums) in 3Q 2014 declined by 54.5 per cent. Similarly, new sales volume has dropped by 42.6 per cent q-o-q.

These factors have markedly affected buyers’ appetite for private property and developers’ confidence in project launches.

In addition, there is a gradual decrease in the inventory of new residential units for sale, with a consistent fall in the number of residential units available from the land parcels sold under the Government Land Sales (GLS) programmes over the last one year. 

The island-wide steep decline in new units launched is largely due to the trend seen in the Outside Central Region (OCR), where the number of units launched has fallen by 69.3 per cent q-o-q to 503 units in 3Q 2014. With only one new project launch in the mass market segment (i.e. Seventy Saint Patrick’s), new sales volume in the OCR has also declined significantly by an approximate 55.6 per cent q-o-q to 738 units in 3Q 2014.