Developer sales hit new highs on pent-up demand

Developer sales hit new highs on pent-up demand

SINGAPORE - Most analysts expect developers' sales to moderate over the next few months after they hit a record 2,793 units in March, nearly four times the 712 units sold in February.

The record figure was due to pent-up demand arising from developers holding back launches in February in the aftermath of January's cooling measures and also due to the Chinese New Year festive period. April and May numbers would be "more stabilised", at around 1,500-1,600 units, says PropNex CEO Mohamed Ismail.

Jones Lang LaSalle national director (research and consultancy) Ong Teck Hui reckons that developers could sell about 1,500-2,000 units monthly in the next few months.

Last month's primary market sales figure of 2,793 private homes (excluding executive condos) is the highest since the Urban Redevelopment Authority began releasing developers' monthly sales data in June 2007. The last time the figure came close to this was in July 2009, when developers moved 2,772 units.

Developers released a record 3,489 private homes last month (up from just 261 in February). They engaged in "active marketing" for their launches, as SLP International executive director Nicholas Mak puts it, cleverly packaging discounts and rebates for buyers to offset or mitigate the impact of the higher additional buyer's stamp duty (ABSD) rates.

In addition to more sensible pricing, the attractive locations of projects - many near MRT stations - added to the appeal of launches. Some anxiety about further cooling measures, most notably a prescriptive mortgage servicing ratio cap for private home buyers, also added to the sales momentum, says Mr Ismail.

A caveats analysis by Savills Singapore shows a recovery in permanent residents' share of non-landed private home purchases across primary and secondary markets combined, to 18.7 per cent in March. In February, the share had slipped to 14.3 per cent from 19.8 per cent in January and 20.6 per cent in December. PRs were slapped with 5 per cent ABSD on their first residential property purchase effective Jan 12. Savills excluded ECs from its study.

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