According to the latest stats from Urban Redevelopment Authority (URA), new private housing sales fell 49% in Dec 2015, reporting only 384 transactions as compared to 759 in the previous month.
Property sales firms also expressed a negative outlook for Singapore property prices with many attributing to oversupply of private housing. Speaking to the media, property research director Christine Li said:
“Developers are likely to price the projects more realistically going forward in view of the weaker demand in the higher-interest-rate environment. We expect more relaunches to surface, a strategy that has helped some developers to clear inventories in the quickest possible way”
There is also a concern for growing number of private housing reaching their 5-year deadline which will further decrease private property pricing. Executive officer from ERA, Eugene Lim believe that more developments will contribute to a higher supply:
“Developments that are reaching their five-year deadline for Additional Buyers’ Stamp Duty remission are also likely to step up their marketing efforts to move sales in order to avoid the hefty payments otherwise.”
Property director Ong Teck Hui from JLL also added that economic slowdown will be the key aggravating factor for poor demand, instead of government cooling measures and rising lending rates.
“While the cooling measures and rising interest rates will continue to moderate demand, it is the magnitude of the economic slowdown that is most likely to determine buying sentiment in 2016 … A more severe economic slowdown would spark caution among buyers, reduce demand and lead to lower market activity than 2015”
Property developers have also been holding back their sales launches with only 173 private housing launches in Dec 2015. However, the overall sales volume for 2015 still exceeds 2014 by 2.5%. Pricing may have dropped but with median pricings hovering above S$1,000 psf, they remain largely unaffordable to Singaporeans’ median income of S$3,770/mth.