Big Drop in The Number of Private Properties Sold in December 2013 Vs November 2013

Figure 1: Guillemard Residences
The URA released figures today that showed a plunge in both the number of properties sold (-80%) and the number of units launched in December 2013 when compared to November 2013. The cooling measures, especially the TDSR, are taking a real toll on property sales as is evident from these figures and more visibly from the low traffic at showflats in recent times. The TDSR has sidelined buyers who do not meet the 60% debt ratio, reduced the funds of others and generally made buyers more cautious. Worries about interest rates and the reduction in quantitative easing in the US may have an impact on sentiment. Finally, the decline in HDB resale prices may dampen the flow of upgraders from HDB to private property. All these factors appear to support a slow down in sales and prices in the near future.
Table 1: Number of Units Sold Per Month
Month |
Total |
December 2013 |
333 |
November 2013 |
1714 |
Of the 333 units sold in December, 74 units were ECs of which 24 were from Forestville EC in Woodlands and another 18 from Skypark Residences EC in Sembawang. The median psf for these two ECs were 736 and 791 respectively. The best selling private developments were Guillemard Residences (26 out of 146 units, 1494psf), The Glades (1477psf) and La Fiesta (1197 psf). These are located in the Guillemard, Tanah Merah and Sengkang areas, all in OCR or RCR.
*This author notes that the range of psf values above overlap some freehold psfs which means that even in this climate, decent freehold deals can be found if one knows where to look.
Singapore Business Review (see http://sbr.com.sg/residential-property/news/private-home-prices-in-singapore-seen-slip-5) mentions estimates of a 5% drop in property prices in 2014 Vs. a small gain of 1.2% in 2013. The total number of units is also estimated to drop from 15015 in 2013 to 12500-14500 in 2014. The sizeable supply coming onstream as well as the general sentiment of the buyers of a price correction will also put more downward pressure on prices. It's becoming a buyers market but any property in a good location and priced attractively will still generate interest and sales.
Another article in SBR (http://sbr.com.sg/residential-property/news/chart-day-graph-proof-home-price-indices-are-starting-crack) mentioned more data that expects a 5% drop in 2014 and 5-15% drop in prices in 2015. The 4th quarter of 2013 saw the first drop in prices in 7 quarters and prices are not 61% above the last trough in 2Q09.
Table 2: Number of Units Launched Per Month
Month |
Total |
December 2013 |
118 |
November 2013 |
2172 |