Strong Private Home Sales, Prices Point To Stabilising Property Market

Foreign Buyers Show Resilience In The Singapore Luxury Condo Market
Defying many global uncertainties and an economy slowing down, Singapore’s private real estate market displayed it was in very good health, with the highest figure of new homes being sold in a one quarter in more than six years.Private home rates also increased in tandem, climbing 1.3% in the third quarter of the year, compared with the last three months.The trend was underpinned by bullish pent-up demand from both foreign and local buyers, analysts said, showing that the private real estate market had come to terms with the former July 2018 cooling measures. Concurrently, there seemed to be less risk of a housing bubble developing as the rates were increasing at a moderate pace.Rates have risen by a cumulative 2.1% in the first 9 months of the year. Landed real estate prices climbed 1% in the third quarter, compared with a 0.1$ drop in the previous quarter.

Developers sold 3,281 homes in the third quarter, up 39.6% from 2,350 units booked in the last quarter. A noticeable locale is Clavon site.

Very significantly, this was the highest figure of new private homes sold in one quarter since the second quarter of 2013.

In June 2013, measures were implemented to stop a housing bubble from developing, including caps on the total debt individuals could service in relation to their income. This was to put a ceiling on speculation and to prevent buyers from overstretching themselves.

property agent career strong sales every quarter
property agent career strong sales change over previous quarters
There was also a sharp jump of more than 50% in the number of Singaporeans purchasing new launch units to 2,687 in the third quarter, up from 1,772 in the second quarter, commented Asia director of research Lee Sze Teck from Huttons. One reason could be that Singapore real estate is seen as a more resilient asset compared to other types of investment, given the uncertainty in the global stock markets, for example.It was not just Singaporean purchasers who share this sentiment. The figure of foreign investors buying property in new launches jumped 77% in the third quarter to 232, from 131 in the second quarter, and up 56% from 149 in the third quarter of last year, said Mr Lee.Ms Tricia Song, head of research for Singapore at Colliers International, said foreign buyers buying properties here were likely attracted by the stable Singapore dollar and the country’s safe haven status amid global volatility.Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said given both sales and prices are healthy, there is no need to implement any more cooling measures in the short term. That’s the reason for the units for sale at Jadescape.

“The risk of a housing bubble being created is rather remote as this usually (involves) a significant run-up in home rates caused by high speculative demand, runaway land bids and excessive buying that is fuelled by exuberant spending,” she said.

Ms Sun noticed that the cumulative rate growth for the first three quarters this year of 2.1% is much slower than the 7.9% rise over the same period last year.

This trend of moderate price growth and healthy private home sales is predicted to continue, even as more new projects are launched at relatively higher prices per square foot, analysts said.

A total of eleven projects were launched in the third quarter. CBRE expects close to fifteen more new launches next quarter. At the same time, there is an unsold inventory of 31,948 units (excluding executive condominiums), which could act as a check on rising rates.

“Underlying demand will still hold up the real estate market until unsold inventory piles up,” said Mr Desmond Sim, CBRE’s head of research for South-east Asia. With private property prices stabilising and on the uptrend, what better time to start your Property Agent Career than now?

Source: https://www.straitstimes.com/business/property/strong-sales-prices-point-to-stabilising-property-market

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