Private residential sales won't rebound sharply in September

Only "some improvement" predicted at best.

According to property research firm Jones Lang LaSalle, "in September, we expect some improvement to the launch and sold figures but a sharp rebound is unlikely."

"Developers have had two months to size up the market and re-evaluate their pricing strategies. Under these circumstances, we could see launch phases with smaller quantum, in keeping with potentially slower demand and lower pricing than originally intended, when the market was more buoyant," it added.

The Jones Lang LaSalle forecast came as private residential sales in August 2013 showed slightly better numbers. But when compared to the periods prior to the implementation of a stricter total debt servicing ratio (TDSR) rules, it showed a still-relatively anemic performance.

The month of August recorded 927 private residential units launched and 742 units sold - an improvement from July’s 557 units launched and 482 units sold.

"It is still a far cry from the first half average of 1738 units launched and 1802 sold, before the TDSR kicked in. While the market is generally slower during the Hungry Ghost month, the TDSR has also kept the market at a slow pace in August," said Jones Lang LaSalle.

Eight new projects (excluding executive condominiums) were launched for sale in August, comprising mainly small to medium-sized projects as developers are still cautious due to the demand uncertainty caused by the TDSR.

The projects are Floraville, Kensington Square, 8 Farrer Suites, RV Residences, The Bentley Residences @ Kovan, The Tembusu, Treasures @G6 and 23 RC Suites.

Better performers included The Tembusu, a freehold project near Kovan, which achieved 65% sales take-up with 218 of its 337 units sold while Kensington Square, a mixed use freehold development at Bartley sold 61 of the 112 units launched.

The low sales quantum in the other new launch projects is indicative of slow demand, suggested the property research firm.

Of the five new projects launched for sale in July, some of them had no sales in August while a couple made slow progress, added Jones Lang LaSalle.

"We also compared the average of the top 5 projects with highest sales in May and June (pre-TDSR) with those in July and August. The May and June averages were 184 and 236 units respectively, while the average for July and August were 30 and 80 units respectively. This shows how demand has slowed post-TDSR. If this trend continues, the days of mega-launches with quick sell-out may be over unless projects are 'priced-to-sell.'" Jones Lang LaSalle said.