There's a silver lining behind December's dismal home sales data

Have sales volumes hit bottom?

Developers sold just 384 condominium units in December, marking a 49% month-on-month drop. Although the headline figure looks fairly dismal, Barclays notes that the sales figure suggests that underlying demand remains resilient.

“Notwithstanding the usual year-end lull, these are the highest December sales since December 2012. Sales were down m/m on no new project launches during the month given the holiday period, as well as the underlying sluggishness in demand due to the prolonged effects of the cooling measures, rising interest rates as well as the slowing economy,” Barclays said in a report.

December’s sales data shows that developers sold a total of 7,528 units, 3% above 2014’s 7,316 units. 

Meanwhile, price declines have decelerated. Flash price estimates released early in January showed that, the price decline slowed to -0.5% q/q (from -1.3% in 3Q15), bringing the 2015 full-year decline to 3.7%, compared to the 4.0% fall in 2014.

“Volumes may have bottomed as prices had fallen 8.4% since 3Q13,” Barclays said.