Private home sales up in November

By The Folks @PropTalk - December 15, 2010 No Comments

Private home sales in November rebounded about 80 percent on-month to hit 1,909 units - the second highest in 11 months. This is according to a CNA report today.

That brings the total number of homes sold so far this year, to 15,025, surpassing the 2007 sales record of 14,811 units.

The surge in November sales comes just three months after the government introduced its latest round of measures to cool the property market.

Lakefront Residences in Jurong was the most popular property selling over 437 units at $1,075 per square foot last month.

Coming in second was Waterview in Tampines, which sold 376 units at $903 per square foot, while Spottiswoode Residences followed with 258 units sold at $1,853 per square foot.

This buying fever in November caught many analysts by surprise.

Tay Huey Ying, Director (Research and Advisory), Colliers International, said: "It just goes to show or prove that a lot of investors are still viewing property as a safe place to park their wealth in spite of the high exposure to policy risks.

And I think another driving factor for November's high sales volume could also be foreign purchases, diverted from the HDB resale market, as well as from Hong Kong and China, in light of their recent property curbs.

With high sales volume, with feverish buying fever, there is bound to be some upward pressure on prices although the ramped up government land sales programme could put a check on the rate of price growth.

If what is driving the November sales happens to be foreign purchases, who may not be too bothered about potential launches, potential supply, then I think it does warrant certain further measures to cool the buying fever."

Industry watchers say the government may end up introducing another harsher set of cooling measures, such as a tax on profits from property sales in the next few months.

Colin Tan, Head (Research and Consultancy), Chesterton Suntec International, said: "What's going to happen if the buying doesn't stop and while we may not feel the impact now, but the consequences may come maybe a year or two later and it can be pretty adverse.

We'll have a lot of units up for rental, then the rentals could collapse especially when there's a lot vested buying.

The worse is of course when rentals come down, and holding cost go up as well, so that will reduce the yield and when yield is miserable, some investors may opt to sell or are forced to sell and that may start a domino effect."

Analysts say the latest figures also show that properties with strong branding and good locations remain the most attractive.

Although the November statistics came as a surprise, many believe the number for December will come back down as developers launch fewer properties over Christmas and New Year.

For the month of December, property watchers expect between 800 and 1,300 units to be sold.


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