ST : Lacklustre property sales as cautious mood prevails

Sep 6, 2010

Lacklustre property sales as cautious mood prevails

Homes in mass-market segment appear to be most affected

By Jessica Cheam

WAIT-AND-SEE was the order of the day at showflats over the weekend - the first since measures aimed to cool property speculation were introduced by the Government last Monday.

The mass-market segment appeared to be the most affected, with thinner crowds and noticeably fewer sales. At more upmarket properties, there was still some interest among genuine buyers.

There were no new launches over the weekend, but at projects that The Straits Times visited, sales were poor.

At The Minton, a 1,145-unit condominium in Lorong Ah Soo, a healthy crowd was seen but actual sales were lacklustre, said Mr Peter Ow, managing director of residential services at Knight Frank, the agency selling the condo.

'The crowd levels were the same as the previous weekend, but take-up was poor. The sentiment on the ground now is buyers want to wait and see what happens in the property market.'

The condo has sold 437 units at an average price of $860 per sq ft (psf) to date.

Property agents interviewed said overall, the mood seems to be cautious, with most buyers now keeping that home purchase on hold.

HSR agent John Chan, 26, who took his clients to the Waterfront Gold showflat in the Bedok Reservoir area said the recent measures have 'tipped many borderline buyers into the wait-and-see group'.

'People want more indication of whether prices will hold or fall before making decisions,' he said.

Developers appear to have maintained their selling prices for now, a move which probably gave buyers another reason to hold back.

A Frasers Centrepoint spokesperson said there were no sales done over the weekend for Waterfront Gold. To date, 200 out of 272 units have been sold at an average price of $980 psf.

The showflat was relatively quiet, with more agents milling around than there were buyers drifting in.

Over at Seletar Hills, Far East Organization sold eight homes at an average price of $1,065 psf over the weekend at Phase 2 of The Greenwich, a 319-unit leasehold project.

In contrast, 34 units were snapped up in the week from its Phase 2 launch on Aug 23 to Aug 29. It had sold out 174 units in its Phase 1 launch previously.

This hit on the mass-market segment, typically made up of upgraders, had been expected by property analysts.

'This segment was the star performer this year, so naturally it will take a hit as buying sentiment has cooled as everyone is waiting to see if prices will come down,' said Chesterton Suntec International research and consultancy director Colin Tan.

The new measures included tighter lending rules for home owners with existing mortgages looking to buy another property. They can borrow up to only 70 per cent of the value, down from 80 per cent. Assuming a price tag of $1 million, buyers will have to fork out an extra $100,000 for the down payment, a hefty sum for an upgrader.

Those who buy an HDB resale flat on or after Aug 30 must also dispose of their private property - including any held overseas - within six months of the HDB purchase.

One buyer, Mr Terence Tan, a 37-year-old flight attendant, said that the higher down payment has made it more difficult for buyers such as himself to upgrade.

'But if I really like the home and the price is right, I will fork out the higher down payment to secure it,' he said.

Agents agree that there will still be buyers who will sign on the dotted line if they feel the development is unique enough and will thus keep its value.

Retiree Ng Eng Koon, 65, who was at The Greenwich showflat looking to buy his retirement home, said the new rules will not deter him from buying if he likes a home.

'No one can predict what will happen now, even the Government. I don't think the rules will have great impact on genuine buyers, only the investors,' he said.

Agents added that there will also be some genuine buyers who need homes and cannot wait.

The mid- to high-end market still seemed to attract buyer interest. BS Capital's The Lumiere at Shenton Way saw a muted crowd, but people were buying.

A property agent who declined to be named said that the project - which has been completed - has not been drastically affected as the buyers 'can afford to invest'. He had personally sold two units a few days ago, after the new measures were introduced.

Homes at the 168-unit leasehold project are priced at about $2,500 psf.

Another reason for the lacklustre sales activity could be the Hungry Ghost Festival, which ends tomorrow, said market observers.

With a few of the recent projects having sold out, buyers may also be hoping for new launches to offer more choice.

The best time to gauge the impact of the curbs will be when there are new launches, noted Chesterton's Mr Tan, although this may not be for some time yet as developers are widely expected to put these on the backburner.

'We have received feedback that buyers are waiting to see if developers will lower their prices, and they might return to the market when this happens,' said Mr Tan.

jcheam@sph.com.sg


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'The crowd levels were the same as the previous weekend, but take-up was poor. The sentiment on the ground now is buyers want to wait and see what happens.'

Mr Peter Ow, managing director of residential services at Knight Frank on sales at The Minton in Lorong Ah Soo