Developer sales plunged by 43.92% to 706 units following cooling measures.
Following the announcement of new cooling measures, developer sales plunged by 43.92% to 706 units in June as home buyers held back to compare projects and developers overestimated their market confidence.
For Desmond Sim, CBRE Research's head for Singapore and Southeast Asia, July sales are expected to surpass June sales and this will be "the calm before the storm." Sim expects sales momentum to slow, and has revised its outlook for new sales down to 8,000-10,000 units.
Tricia Song, Colliers International's head of research for Singapore, said the property cooling measures will put a drag on home sales for the rest of the year as the higher Additional Buyer Stamp Duty (ABSD) could curtail investment demand from both locals and foreigners, and the larger cash outlay required for down payment on homes weighs on buying interest.
"Sales in July will likely jump from the June numbers, bolstered by the flurry of last minute deals done – estimated at 1,000 units from three project launches – The Stirling Residences, Park Colonial and Riverfront Residences - on the evening of July 05 to beat the ABSD deadline," Song said.
Moreover, she noted that developers and buyers are also likely to shun the month of August due to the Ghost Month which starts on 11 August.
For the whole of 2018, Colliers projects that new private home sales (excluding ECs) could come in at 8,500-9,000 units – 15-20% lower than the 10,566 units shifted in 2017.
For already launched projects, they are unlikely to show a downward trend in actual transacted prices. For those yet to be launched, developers are likely to trim their average selling prices from their original intended aggressive pricing to current achieved levels, instead of a continuously increasing trajectory.”
Huttons Asia head of research Lee Sze Teck noted that Riverfront Residences, Park Colonial, Stirling Residences, and Daintree Residences will be launched for sale in July. The first three projects sold over 1,000 units in one night after the announcement of the cooling measures.
"Double-digit sales continued to be registered at these three projects after 5 July, a testament to the adequate liquidity and fundamentally healthy demand in the market," he argued. "We will probably see around 1,500 units being clocked for the month of July."
OrangeTee & Tie head of research & consultancy Christine Sun also expects sales to surge in July, citing the same three projects. "However, we expect new sales to fall thereafter as a knee-jerk reaction to the latest cooling measures. August may especially see a large dip in sales volume due to the lunar seventh month, which usually sees slower sales," she said.
Sun also observed more first-timers in the new launches as they are less affected by the cooling measures. "The trend is likely to continue as the stabilising prices will present good buying opportunity for first timers who can afford to pay the extra 5% cash / CPF down payment (as a result of the lower LTV limit). We expect the full-year sales to be between 8,000 and 9,000 units," she concluded.
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