Private home sales fall to 3 1/2 year low

Private home sales fall to 3 1/2 year low

SINGAPORE - Singapore's new private-home sales last month slid to the lowest since December 2009 as investors baulked at new curbs on property loans and developers marketed fewer projects.

Sales of new private homes fell to 481 units last month, 73 per cent lower than June, according to data released yesterday by the Urban Redevelopment Authority. Sales rose to a record 2,793 units in March.

Analysts said that new rules governing how financial institutions grant property loans to individuals, unveiled in June, may have dented sales. Another factor to consider was aversion to buying a home during the Chinese Hungry Ghost Festival.

"Prospective home buyers are exercising caution...before they make a property purchase," Ms Alice Tan, head of consultancy and research at Knight Frank, said. "New sales volume is likely to stay low in August at around 500 to 700 units."

The new framework stipulates that a borrower's debt-servicing ratio must not exceed 60 per cent.

But the low sales volume could be just a hiatus, said Ms Christine Li, head of research and consultancy at OrangeTee.

"We do expect transaction volume to rebound strongly in September and October, when new launches are back in full force," she said. Despite the fall in volumes, prices seem to be resilient, she added.

The private-residential-property price index rose 1 per cent to 215.4 points in the three months ended June 30.

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