Too soon to say property market has recovered

Aerial view of high-rise apartment buildings in Singapore.

Despite the resurgence in private home sales, analysts believe it is still premature to say that the property market has turned around, reported the Straits Times.

Hoi Hup Realty sold all its 531 units at Hundred Palms Residences EC within seven hours of the project’s launch on Saturday (22 July) – a feat last seen in 2014 with mixed development The Hillford in the Bukit Timah area, while GuocoLand moved 90 out of the 450 units at its luxury condo project Martin Modern in Martin Place over the weekend.

“The good performances of recent launches indicate that there is pent-up demand for Singapore properties… (But) prices have stubbornly continued to decline. So, it might be too soon to say that the market has finally turned a corner,” said OrangeTee’s head of research and consultancy Wong Xian Yang.

Private homes prices dropped over the past three years, albeit the pace has been slowing, with prices falling 3.1 percent last year following declines of 3.7 percent in 2015 and four percent in 2014.

Based on the government’s latest flash estimates, private home values declined by 0.3 percent quarter-on-quarter in Q2 2017, a slight moderation from the 0.4 percent quarter-on-quarter drop registered in Q1 2017.

The easing of prices has led to an increase in sales.

In the first half of 2017, over 6,500 new private homes, excluding ECs, were sold, up 72 percent from the 3,814 units sold in the previous year.

But while analysts expect continued brisk buying activity, they underscored that demand will be driven by site attributes and not all projects would be a sell-out.

“New launches are selling well mainly because of marketing hype… If the property market was so hot, why are we not getting lots of viewings for resale homes?” said Ku Swee Yong, chief executive officer of International Property Advisor.

“Prices in the secondary market are still weak; many owners are selling at losses,” he added.