Wednesday, October 24, 2012

Housing sector to end year on high

Singapore’s private home sales volume could reach a total of 21,000 units by year end, given the robust sales recorded during the first three quarters of 2012, according to a report by Knight Frank.

In September alone, a record 2,621 new homes changed hands, recovering from a slowdown seen during the Ghost Month. While many buyers shrugged off the superstition, developers still held back on major launches during the period.

In Q3, a total of 5,115 units were launched and 5,999 sold, up 11 percent from Q2.

“Most of the new launches experienced good responses as developers enhanced deal sweeteners to sustain buying interest amidst a low interest rate environment,” said Knight Frank.

Moving forward, the report also highlighted that developers will likely adopt a wait-and-see approach before rolling out new launches, in view of the government’s latest cooling measures which includes a cap on home loan tenure.

In terms of prices, “a potential stabilisation of price growth towards end-2012” could happen as a result of the latest property curbs, with home buyers reviewing their budgets and comparing prices between new launches and resale homes.

“Properties that are of lower price quantum could receive healthier response in light of the loan-to-value limits and higher mortgage instalments for shorter loan tenures. It remains to be seen in the near term, if the latest measure would have an intended ‘cooling’ impact on price increases,” Knight Frank added.

On the upside, the residential property market will be supported by a number of factors, including strong underlying demand, liquidity growth in the financial system, stable income growth of home buyers and low interest rates.

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