March residential sales will be halved

February saw a sharp take-up of private residential units but this month it will dwindle to around 1,200 units, says Colliers.

Homebuyers went on a binge in February after holding back beginning last December, when the prohibitive Additional Buyer’s Stamp Duty was first introduced. The recent flood of promotions and discounts could have drawn out the cautious buyers, and helped them overcome fears of price drops and additional costs.

But March will see a sharp drop in sales, as the pent-up demand dries up, according to Colliers International in a release.

“Homebuyers were out in force in February 2012, snapping up a total of 2,413 private residential units. This reflects a 28.9 per cent month-on-month (MoM) increase and is a new high recorded for monthly private home sales since July 2009’s 2,772 units. The pent-up demand arising from prospective buyers holding back on purchasing commitments following the imposition of the Additional Buyer's Stamp Duty (ABSD) in December 2011, as they monitored the market and waited for possible price declines has created the impetus for the soaring sales numbers,” Colliers said.

“Moreover, the creative promotions and sweeteners dangled by developers in various forms to cushion the impact of the ABSD - such as part absorption of the stamp duty, price discounts, early bird or VIP preview prices, as well as furniture and fit-out vouchers etc - have also encouraged homebuyers to commit,” it said.

“Developers of mass-market projects are likely to continue with the launch momentum in March 2012, as it is to their interest to launch earlier than at a later date given the positive market sentiment and possible project sales competition arising from the ample state land supply for new homes development,” it added.

“Meanwhile, encouraged by the buoyant buying sentiment in the mass market segment, developers are likely to continue testing the market by cautiously releasing projects in the CCR and RCR. Nonetheless, prospective homebuyers will remain selective, depending on the pricing, product and locational attributes of upcoming project launches,” it said further.

“After the sharp increase in sales fuelled by pent-up demand and developers’ creative marketing strategies, primary sales volume for March 2012 is expected to ease from February’s level to hover around 1,200 units.”