Primary home crash seen in 2012

Only 12,000 primary homes is expected to be sold this year far below the usual 16,000 levels.

Already, 2011 saw primary homes sales dip to 16,025 units from 16,357 sales in 2010, according to a DBS Vickers research report. 

The property market has soured enough to dampen sales even further in 2012 as foreigners balk at more restrictive property measures like the Additional Buyer's Stamp Duty, and locals hold off on purchases until prices plummet to bargain levels.

Here's more from DBS Vickers:

Weighed down by latest policy move. As expected, primary home sales in December was sharply lower at 670 units. Excluding ECs, sales dropped by 63% m-o-m to 632 units, the lowest since 1Q10. This is the result of buyers taking a wait and see attitude after the imposition of Additional Buyer’s Stamp Duty (ABSD) announced on 8 Dec while the year end holiday season also meant a slower pace of launches by developers. A total of 937 units were offered, half of that in Nov, translating to a take up rate of just 67%. That said, ASPs remained firm with prices in the OCR and CCR seeing flat or moderate growth. For the year, primary sales came in at 16,025 units, a shade below 2010’s 16,357 units.

Market activity to fizzle out after recent policy measures. Going into 2012, we expect overall primary transaction volume to taper down to 11,000-12,000 units, as the latest policy restrictions are likely to affect investment and foreigner demand. Owner occupier buyers are likely to hold back in anticipation of a dip in prices. Recent land tenders have also moderated, which reflect developers’ cautious outlook. We expect home prices to retrace by 5% this year --muted impact due to the extended low
interest rate environment.