SINGAPORE : Demand for new private homes rebounded in August after lacklustre sales in July.
Figures from the Urban Redevelopment Authority released on Monday show that sales were up nearly 54 percent on-month to 742 units in August, excluding executive condominiums.
But some analysts say that is still dismal compared to the 1,427 units sold in the same period last year.
Mass market residential properties continued to dominate sales last month.
The Tembusu, a freehold development at Tampines Road, was the top seller, moving 218 units at a median price of S$1,547 per square foot (psf).
It was the top selling project, followed by Kensington Square which sold 61 out of 112 residential units at a median price of $1,511 psf.
Christine Li, Head of Research & Consultancy at OrangeTee said, "Both projects were launched in August, and have achieved a take-up rate of 65 percent and 54 percent respectively in one month. This shows that there is still strong demand for attractively priced projects in good locations."
And it helped to boost overall home sales last month.
Analysts say the slight recovery in transaction volume in August was driven by an increase in the number of new launches as well as some home buyers returning to the market after completing their mortgage assessment under the total debt servicing ratio framework, which was introduced in end-June 2013.
Despite the property loan curbs and the Hungry Ghost Festival, developers placed 927 new units for sale in August, up 66 percent compared to July.
Going forward, some analysts expect sales to remain muted for the rest of the year with about 700 to 800 units of new private homes to be sold per month, bringing the total transaction volume for the year to between 14,000 and 16,000 units, down from the 22,000 units sold in 2012.
Some analysts say private home prices should still hold up in the third quarter...
But they could come under some pressure, especially in the high-end segment if demand continues to be weak.
Alice Tan, Associate Director & Head, Consultancy & Research, Knight Frank, said: "We could expect developers to be more aggressive in their marketing strategies, either by launching interesting design concepts or they may look at pricing levels so as to improve sales performance. The market is in a wait and see situation right now, whereby buyers are still looking out for properties within their budget (while) at the same time developers are also exploring what would be the best price level for their project."
Sales for executive condominiums, however, have been impressive, accounting for nearly half of the total monthly sales.
Of the 1,468 new units sold in August, 726 units were executive condominiums.
Some market watchers say concerns over a price increase in the future could have spurred such sales.
Donald Han, Managing Director, Chesterton Singapore, said: "We are potentially looking at prices moving upwards by about 10 percent if there are no policy changes on EC, then demand should be fairly stable. So long as developers are able to go out there in the market and get two times over-subscription, that is a fairly strong number which means when you are ready to sell, you should hit 50-60 percent."
The best selling EC projects in August were Ecopolitan at Punggol with 335 units sold and Lush Acres at Sengkang, selling 311 units.