Chart of the Day: June home sales lag as new launches fizzle out

It's dropped 49% compared to May.

Home sales in June have slowed on back of a lack of new launches, according to a report by CIMB. In June 2016, home sales totaled 536 sans executive condos (768 with ECs), which is 43% YoY jump but a drop of 49% MoM.

“This level of sales is below the YTD monthly average and the wide swing in the monthly transactions reflects the lack of new launches. Only 234 new units were launched, translating into a take up rate of 2.3x,” CIMB notes

In contrast to May’s sales mix which was concentrated in the fringe areas, June sales saw high end units make up 9% of sales, city fringe unites 31% suburban homes 60%.

Meanwhile, CIMB reveals that private home prices dipped 0.4% QoQ in 2Q16, led by outside of the central region, which slipped 0.7% QoQ while HDB resale prices inched up 0.1% QoQ.

Further, the residential market continues to be under pressure given the inflow of newly completed units. As such, CIMB maintains a 5-8% price correction in 2016.

Moreover, the looming deadline for unsold inventory facing Qualifying Certificate and Additional buyers’ Stamp Duty penalties should heat up from 2017. CIMB anticipates developers to clear stock, which will provide an additional drag to private home prices, on top of the supply glut.