Tuesday, July 17, 2012

Singapore’s Home Sales fall for a second month

Latest property sales figures from the Urban Redevelopment Authority (URA) have shown sales of 1,371 private homes in June 2012, a 19 percent decline month-on-month (m/m) from the 1,702 of in May 2012. Many analysts interviewed by Singapore’s state media naturally painted a bright picture and told that the drop in sales are attributed more to limited number of property launches during June 2012 rather than a downward trend. And the prices (of course) should stay stable with some 1-2 per cent gain in 2012 according to these property experts:
Conditions in the private property market are still ripe for moderate price growth despite slower sales in the last few months which hit an all-time low for the year in June. 
OrangeTee noted that the weaker numbers did not come as a surprise, given that developers held back many launches in June due to the holiday season, aside from the uncertain global economic conditions. But it said that buyers’ appetite for properties, especially in the Outside Central Region (OCR) remains fairly healthy.  
Png Poh Soon, Head of Research at Knight Frank Singapore, commented that developers continue to be competitive on their bids for well-located sites under the Government Land Sales (GLS) Programme.  So far this year, demand for private homes has been robust, with more than 12,000 units sold in 1H2012, added the consultancy.

But with June 2012 numbers, we now have the total sales of private residential property sales in Q2 2012 and they signal a different picture than these analysts draw:

“Singapore’s private residential property sales dropped 17 percent to 5,572 units in the three months ended June 30 from the previous quarter, according to data released by the Urban Redevelopment Authority yesterday. That’s the biggest quarterly decrease since the three months ended December 2009.” 
“It’s an indication that things are slowing down,” Carolyn Goh, a spokeswoman at PropNex Realty, a Singapore-based real estate brokerage with 4,000 agents, said in an interview yesterday. “It looks like further cooling measures are unwarranted but it also depends on how the market responds in the second half.”

The numbers came just with the news that Singapore’s economy unexpectedly contracted 9.4 per cent quarter-on-quarter in Q2 2012:

Singapore's trade-driven economy contracted by 1.1 percent in the second quarter from the previous three-month period as debt woes dampened European demand, a government estimate showed Friday. 
The unexpected contraction, down from 9.4 percent growth in the preceding quarter, was largely due to an output drop in the biomedical manufacturing industry, the trade ministry said in a statement.

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