Chart of the Day: Price-sensitive buyers push vacancy rate to a record 6.6%

Here are 2 reasons why they're overly cautious.

According to Barclays, developer sales jumped 55% m/m (-46% y/y) to 745 units in April 2014 from a low base in March, but remained at 6-year lows.

This brings YTD sales to 2,536 units, -63% from last year’s 6,892.

Here's more from Barclays:

We note buyers are getting more price sensitive: 1) between the two new launches, The Sorrento sold 95% of total at S$1,414psf while Lakeville only sold 30% at S$1,318psf, probably as The Sorrento presented more value as it is freehold and nearer to town than Lakeville; 2) CapitaLand’s Sky Habitat sold 130 units after cutting prices by 11-16% to median price of S$1,377psf in its relaunch, bringing take-up to 61% two years since the launch.

We expect sales in May to pick up further on Commonwealth Towers (31% sold) and Coco Palms (to start sales on 17 May). Nonetheless, we maintain our bearish stance on Singapore residential and, expect price declines to accelerate towards the end of 2015.

In April, CapitaLand relaunched its 509-unit Sky Habitat at prices 11%-16% lower than its initial launch in April 2012. They sold 130 units in April, which brings total sales to 312 units out of 509 units, or 61%. According to The Straits Times, another project, The Panorama, will be relaunched at S$1,100-1,340psf, up to 14% lower than its January 2014 launch prices of S$1,234-1,591psf.

Luxury home sales remain anaemic with the highest-priced unit at S$2,592psf. We estimate some 14 units were returned in April, lower than the 38 units in March.