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Sales of new private property drop by half in June

Sales of new private property drop by half in June.

Sales of new private homes halved in the traditionally slow month of June, after they surged to a 10-month high in May.

Developers sold 536 new units - excluding executive condo (EC) apartments - last month. That was down 49 per cent from the 1,058 units transacted in May, figures from the Urban Redevelopment Authority (URA) showed yesterday.

The decline was largely owing to the lack of new project launches and the seasonal effect of the June school holidays, analysts said.

However, when compared with the 375 homes sold in the same month last year, June sales surged by 43 per cent year on year.

"These figures are encouraging as they indicate that more buyers are returning to the market," noted ERA Realty Network key executive officer Eugene Lim.

Home buyers possibly understood that prices will not fall very much more and decided to make their purchases.

Demand for new homes in recent years has been sluggish since the Government imposed a series of cooling measures, including the total debt servicing ratio framework in June 2013. The measures have also lowered private home prices.

The fall in sales last month came on the back of a sharp dip in new projects put on the market. Developers put just 234 new private homes up for sale last month compared with the 1,345 units launched in May.

Mass market homes in the suburbs led sales last month, accounting for about 60 per cent of transactions during the month with 324 units changing hands. This was followed by the 166 units sold on the city fringe and 46 units in the core central region.

The three best-selling private residential projects were all in suburban areas, and, in the absence of major launches, buyers turned to unsold units at existing projects.

Kingsford Waterbay in Upper Serangoon View moved 34 units at a median price of $1,185 per sq ft, The Glades in Bedok Rise sold 32 units at a median price of $1,402 psf, and 31 units at Kingsford Hillview Peak in Hillview Rise went at a median price of $1,315 psf.

Among the top five selling projects, developers were not offering significant discounts. It showed the sales were not a result of price cuts but more towards improving sentiment.

In the EC category, sales fell 30.5 per cent to 232 units last month from 334 units in May. No new EC project was launched in either month. The best-performing EC project was Bellewaters in Anchorvale Crescent, which sold 43 units at a median price of $804 psf.

URA data showed 3,814 new private homes, excluding EC units, were sold in the first half of the year, up 7 per cent from 3,564 units sold in the same period a year ago.

There are signs the market may be approaching its trough. The market has gradually transitioned into a steady phase, with few fluctuations in sales volume between quarters, pointing to the possibility that a bottoming-out is imminent.

Analysts said upcoming projects, such as Parc Riviera in West Coast Vale, Lake Grande in Jurong and Gramercy Park in Grange Road, could help to boost sales, as developers step up launches ahead of the traditional Chinese Hungry Ghost Festival next month.

Adapted from: The Straits Times, 16 July 2016