New private home sales crashed 80% to 259 units

Pace of new launches slowed 'dramatically'.

According to PropNex, developers sold only 259 private homes, excluding executive condominiums (ECs) in December 2013, down almost 80% from the 1,228 units sold in November.

Including ECs, developers found buyers for 333 homes, which also reflect a plunge of 80% from the previous month’s figure of 1,714 units.

For the entire 2013, developers moved a total of 15,162 units, or a monthly average of about 1,200 units. This figure is much lower than the 22,668 units that were registered the same time last year (or about 33% lower).

The pace of new launches slowed dramatically in December — which is traditionally a lull period in terms of home buying. Only a paltry 118 new homes went on to the market, compared with the 1,293 new units put up for sale in November (a drop of over 90%).

Keeping the optimism, Mr Ismail sees the lacklustre sales figures as largely due to the year-end festive season—since most are away on a vacation for relaxation and celebrations with their families.

Another factor is that developers are perhaps delaying the launch of their new projects to probably in end February or even in March —after the Chinese New Year period.

“However, prospective homebuyers are exercising even greater caution in their capital outlay before committing to make the property purchase, more so now that there are numerous buying curbs in place,” explains Mr Mohd Ismail, CEO of PropNex Realty, “they are also highly sensitive to properties with a higher overall quantum.”

Mr Ismail also refuses to rule out the possibility of having even fewer new private homes transacted this year—as the impact of the curbs such as the TDSR and ABSD, are unlikely to wear off anytime soon.

“We can definitely say that TDSR have greatly cut down a buyer and/or investor’s leverage power by the means of mortgage loan to fund the purchase.

When buyers can borrow less money from banks, he or she will become more definitely be more sensitive to the total price of a property as their purchasing power have been eroded. Only those projects which are well-priced and strategically located could entice the buyer to make a commitment,” Mr Ismail comments.