Private home sales, launches crashed over 50% in 2014

These numbers haven’t been seen since the GFC.

The numbers tell a shocking story. New private residential sales and launches crashed to a fresh low in 2014, reflecting volumes last seen at the height of the Global Financial Crisis in 2008.

Data released today by the Urban Redevelopment Authority (URA) showed that private home sales and launches were more than halved in 2014, starkly reflecting the weakness in the local property market.

The URA showed that developers sold a total of 7,316 units in 2014, 51% lower than the 14,948 units sold in 2013.

Meanwhile, developers launched a total of 7,693 units in 2014, a decline of 51.6% from the 15,885 units launched in the previous year.

“Notably, the primary market launch and sales volume in 2014 was the lowest recorded since the global
financial crisis in 2008, during which only 6,107 units were launched and 4,264 new homes were sold,” stated a report by Chia Siew Chin, Colliers International’s Director for Research and Advisory.

Prices of private residential properties decreased by 4% for the entire year, compared with an increase of 1.1% in 2013. This is the first year of overall price decline since 2008.

However, analysts reiterate that the price decline is still too minimal to merit an easing of the government’s stringent cooling measures.

“Given the marginal price declines so far, we do not anticipate a loosening of policy measures on credit and transaction costs this year. This is not unexpected as demand continued to be adversely affected by the tighter credit markets and higher transaction costs.Looking ahead, we expect transactions volumes in 2015 to remain slow. With rising completion and higher vacancy rates, rents are likely to continue to compress, thus adding more downward pressure on capital values,” CIMB analyst Lock Mun Yee stated in a report.