Homebuyers wait on the sidelines

New private home sales remained strong with 1,825 units sold in May. Despite slipping marginally by 5% month-on-month, sales in May have increased 69% year-on-year and exceeds last year’s monthly average of 1,503 units. Excluding executive condominiums (ECs), the volume of sales fell by 13% to 1,575 units month-on-month.

The bulk of the sales (66%) came from the Outside of Central Region (OCR), followed by the Rest of Central Region (RCR) (25%) and Core Central Region (CCR) (9%).

The pace of sales improved in May with nine out of 11 new launches recording a take-up rate of more than 78% for their newly launched units. However, the number of launched but unsold units remained high in May at 5,030.

We expect the current sales momentum to moderate in the coming months. Anecdotally, private home sales have already slowed in June with more buyers choosing to wait on the sidelines for further project launches from the 2H/2011 government land sales programme. Talks on increasing the income limit for first time HDB home buyers may also filter some demand away from the mass market home segment.