The private residential property market has continued its momentum into the new year, in a further sign that the market is on the mend. Sales rose 17.6 per cent last month compared with the same period in 2016, with developers selling 381 units compared with 324 units in the same month a year earlier, data compiled by the Urban Redevelopment Authority showed.

Month-on-month sales rose 3.8 per cent, up from 367 units sold in December last year. Private home sales increased to a three-year high in 2016 as sentiment and demand improved on the back of 13 consecutive quarters of price declines. Analysts expect sales to continue rising this month, but note that the outlook for the rest of the year would hinge on the United States Federal Reserve’s interest rate hikes.

The rise in transactions is a sign that the market is bottoming out, say analysts. This is despite December and January being seasonal holiday periods, when developers prefer to hold off on project launches until after the Lunar New Year celebrations.

“The encouraging start in January suggests that sales in 2017 are anticipated to be higher than 2016, and another sign that the market is bottoming out,” said Mr Lee Nai Jia, senior director and head of South-east Asia research at Edmund Tie & Company.

“Despite cautious optimism among buyers in the market, the uncertain external environment is likely to exert pressure on housing demand and prices,” he said in a statement.

“For instance, housing affordability will likely be reduced if the Fed increases interest rates. Geopolitical tensions and currency movements will also have an impact on housing demand,” he added.

Last week, Real Estate Developers’ Association of Singapore (Redas) president Augustine Tan said it is “still too soon” to conclude that a market recovery is in sight, as he pointed to a persistent glut in all segments of the property market.

With the current line-up in pipeline launches, 2017 will present opportunities for those looking to invest in real estate. And with home prices remaining stable and sales trending upwards, it is unlikely that there will be any changes to the cooling measures in the upcoming Budget, say analysts.

PropNex CEO Ismail Gafoor said: “We are confident the market is stable and can expect greater activities and increased sales in the coming months due to attractive pricing offered by developers.”

“We are expecting February to enjoy a healthy number of transactions, exceeding January numbers, along the lines of 700 units. Whereas in March, we can expect more than 1,000 units sold,” he said. “On top of that, we foresee developers continuing to dangle incentives so as to move their unsold units, making purchases even more attractive for buyers.”

Still, the number of new launches will be lower compared with the past two years, and this will spur sales for the previously-launched projects, said Mr Desmond Sim, head of CBRE research, Singapore and South-east Asia. CBRE expects demand for new homes to remain steady, hovering in the region of 7,000 units for the whole of 2017.

Source:
courtesy of TODAY

by Today

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