Residential Market News Extract - 19 October 2012

Fall in Q3 private home sales 'due to lunar seventh month'

The lunar seventh month is being blamed for a huge drop in the number of private home sales in the third quarter, compared with the previous three months.

5,934 deals were closed in the quarter, sharply down on the 10,780 transactions recorded in the three months to June 30.

Superstitious home seekers are said to avoid buying homes during the inauspicious lunar seventh month period, which cuts across half of August and September.

New home sales were down more than 50 per cent - from 6,007 in the second quarter to 2,659 in the following three months.

However, some new residential projects managed to buck the trend.

Units at One Dusun Residences in Jalan Dusun were almost sold out within two weeks despite launching towards the end of August.

Several projects were also well received after launching late last month - after the lunar seventh month.

Kovan Regency in Kovan Road has sold more than 90 per cent of its 393 units, while Riversails in Upper Serangoon Crescent moved more than 200 flats last month.

Sales involving permanent residents (PRs) were less badly affected in the quarter than other buyer groups such as Singaporeans and foreigners.

Transactions involving PRs fell about 37 per cent compared with the previous quarter, while other groups registered declines of more than 45 per cent.

Sales of new executive condominiums (EC) slowed in the third quarter, possibly because of the increased number of Build-to-Order flats and EC launches.

About 27,000 flats are expected to be launched this year.

As dual ownership of new EC units and Housing Board flats is not allowed, buyers and HDB upgraders might choose to buy a private residential unit instead.

Private property owners cannot own an HDB flat at the same time. This removes ECs, a hybrid between private and public housing, as an option for private property owners.

Source: The Straits Times – 19 October 2012