Burden of ABSD weighs down Dec home sales

Business Times: Tue, Jan 17

(SINGAPORE) The introduction of the additional buyer's stamp duty (ABSD) last month sent developers' private home sales in December to their lowest level in two years, latest official statistics showed, even though the figure for the full year was still a record. The number of private homes, excluding executive condos (ECs), sold by developers plunged to 632 units in December, down nearly 63 per cent month-on-month and 52.6 per cent year-on-year. Including ECs, a public-private housing hybrid, developers moved 670 units last month, reflecting declines of 63.9 per cent month-on-month and 60.6 per cent year-on-year. BT's analysis revealed that buyers returned around 100 private homes (including 20 EC units) in December, probably a knee-jerk reaction to the introduction of the ABSD on Dec 7. This was higher than the around 70 units returned in November Despite last month's sharp slowdown, developers sold a record 18,920 units (including 2,893 ECs) in 2011, going by preliminary official data, surpassing the 17,344 private homes (including 1,052 ECs) they sold in 2010. The Urban Redevelopment Authority will release final 2011 figures on Jan 27. Excluding ECs, developers' private home sales last year totalled 16,027 units, just shy of the record 16,292 units for 2010. Property consultants' forecasts for this year range from 9,000 to 14,000 units. 'With the ABSD already in place, the defining factors for developers' sales in 2012 will be the economic outlook and the prices that will be set by the developers,' said Knight Frank chairman Tan Tiong Cheng. 'Pricing is something developers will have to adjust, before buyers blink. Another factor will be the foreign contingent. If foreign buying is still relatively strong, it may give some impetus for Singaporeans to jump in.' DTZ South-east Asia chief operating officer Ong Choon Fah said: 'The underlying confidence in the market is still there among foreigners. Singapore is a victim of its own success; it's a safe haven and a liveable city.' Excluding ECs, the 632 units sold by developers in December was the lowest since the 481 units in December 2009. Likewise, the 937 units developers launched last month (down 52.4 per cent cent month-on-month) was the lowest since December 2009's 734 units. 'For 2011 as a whole, a total of 17,847 units were launched, a new record,' said DTZ's Asia Pacific research head, Chua Chor Hoon. December's top-selling project was Archipelago near Bedok Reservoir (103 units at a median price of $1,118 psf), followed by The Nautical in the Sembawang area (84 units sold at $882 psf median price), said CBRE. Bedok Residences, next to Bedok MRT Station, which was launched in November, saw 28 units being sold in December but 31 units were returned, taking cumulative sales in the 583-unit condo to 474 units by end-December. Another project that was launched in November, The Palette, in Pasir Ris, saw 61 units being sold in December while eight units were returned, taking total sales to 420 units by end-December, notes CBRE executive director Li Hiaw Ho. An analysis by BT showed six units were returned at Parc Vera, four at The Seawind, three each at Euhabitat and Terrasse,and one or two units at more than a dozen other projects. EC projects that had units returned in December include Arc at Tampines (eight units), Austville Residences (five units) and Blossom Residences (three units). December's highest price transaction (in the primary market) was $3,591 psf at The Scotts Tower, followed by $3,041 psf at Twin Peaks and $3,033 psf at Marina Bay Suites. A price-band analysis of primary market transactions by Colliers International based on URA's monthly developers' sales data revealed that a higher proportion of units were sold last year (80.3 per cent) in the lower price band of $1,500 psf and below, compared with 72.5 per cent in 2010. 'This reflects a shift in buyers' sentiment and their increasing price prudence over the year,' said Colliers director of research and advisory Chia Siew Chuin. Just as private home sales thinned in December in the primary market, secondary market transactions continued to fall for the eighth consecutive month to 709 units in December, according to information from caveats downloaded yesterday , based on DTZ's analysis. DTZ expects primary market sales volumes for January to improve from December's low despite the Chinese New Year holidays. Projects launched this month include Far East Organization's The Hillier along Hillview Avenue, Qingjian Realty's Riversound Residence in Sengkang East and City Developments' The Rainforest EC development in Choa Chu Kang. With additional reporting by Jasmine Ng   Source: Business Times