Private home sales plummet 63% in December

The Additional Buyer’s Stamp Duty has nearly paralyzed sales activity in the market.

After a remarkable performance in November, private home sales in December plummeted M-on-M, with a total of 632 private homes transacted compared to 1,701 transactions (excluding Executive Condominiums) in the previous month, according to PropNex Realty's report. This was a decrease of 1,069 units or a plunge of 63% M-on-M. The Outside Central Region was the most buoyant, contributing 64.7% of all units sold.

“The slowed sales activity is mainly attributed to the Additional Buyer’s Stamp Duty implemented on December 8, the December festive holidays as well as the uncertain economic outlook for 2012. This result was as predicted when the policy was implemented - transaction volume dived by 57% in the core central region. This latest round of cooling measure had been prohibitive for potential foreign investors and the impact is evident in the record lowest transaction volume in the Core Central Region in 2011," says Ms Carolyn Goh, Corporate Communications Manager of PropNex Realty.

"Cautious sentiments prevails in December, with potential private homebuyers preferring to keep their options open before committing to any purchase in waiting for price corrections. Home owners or investors are now holding out with their property portfolio and watching the market trends while make plans to rent out their property as an alternative,” she added.

The signs of lower land bid prices may indicate that prices will be adjusting to the market demands in the private residential market in the coming months of the year. Also, some home buyers might be delaying their purchase decision in anticipation of the wave of new launches expected after Chinese New Year.

In December, the top selling projects were—Archipelgo at Bedok Reservoir Road, which sold 103 units with median prices of $1,118psf, The Nautical at Sembawang Road sold 84 units at a median price of $882psf and The Palette at Pasir Ris sold 61 units at $901psf, while Cardiff Residences sold 30 units at $1,328psf.

Private sales volume in December had seen a 69.2% nosedive in OCR M-on-M, and the record lowest private sales volume was in the Core Central Region mainly consisting of foreign buyers. “Overall, sales activities have been strong in 2011 which is evident in the top selling

32 projects mainly in the OCR, 9 projects were from RCR while others were Executive Condominiums. This is 11.5% increase in transaction volume with a total of 16,306 units sold, compared with 2010. 2011 had seen more HDB upgraders fulfilling their aspiration of owner private property homes as the bulk of activity is in the OCR mass market condominiums. It will be interesting to see the results of private property sales from first quarter of 2012 onwards, especially after the ABSD cooling measures so as to get a clearer picture of where the market is heading.

Potential buyers (Singaporeans and foreigners) are now adopting a wait and see attitude, analysing the impact of this latest cooling measure and its correction before entering the market again. However, given the uncertainty in stock markets and with interest rates remaining low, in the long term, private property in Singapore will continue to attract investors, both local and foreign,” remarked Carolyn Goh.