New private home sales take a hit after mortgage curbs

New private home sales take a hit after mortgage curbs

Home sales by developers slowed significantly as they held back launches and took stock of curbs on home loan tenures which took effect on Oct 6.

Statistics compiled by the Urban Redevelopment Authority based on developers' sales data show that 1,948 private homes excluding executive condos (ECs) were sold in the primary market in October, down 25.7 per cent from September.

However, no alarm bells have been set off, with many market watchers noting that last month's sales still exceeded the 1,633 units which developers launched in the same period, continuing a trend seen since June. The October launch figure was down 26.6 per cent from September.

Knight Frank chairman Tan Tiong Cheng says: "The general direction in terms of home buying volume in the primary market still seems to be up. Month to month, there may be some cooling off. There's bound to be some reaction when government introduces more sets of measures. People sit back, reflect and hold back their buying decision for a while.

"If there's no price drop, they'll find a way around the measures, for example, buying property in their children's names to get around the lower loan-to-value limit for those with an existing home loan and to save on the 3 per cent additional buyer's stamp duty."

The latter is payable by Singaporeans who own two existing residential properties and buy their third or subsequent property.

Last month's 1,948-unit sales was up 39.9 per cent from October 2011.

In the first 10 months of this year, developers have sold 19,792 private homes. Colliers International director Chia Siew Chuin predicts the pace of sales will slow from the year-to-date average monthly sales volume of 1,979 units to around 1,300-1,500 units each for November and December. She cites the school holiday and festive season along with a more cautious mood among those affected by the tightened mortgage rules.

Still, the full-year tally will touch a fresh high, forecast at around 22,000 to 24,000 units by property agents. The previous record, in 2010, was 16,292 units. Last year, the figure was 15,904 units.

Jones Lang LaSalle national director Ong Teck Hui said that of the 1,633 private homes developers launched last month, only 659 were in fresh projects. The majority 974 units were newly released units from earlier projects. "This reflects caution among developers amid uncertainty following the MAS measures."

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