Private home sales fall far short of pre-TDSR levels.
Weaker sentiment and the likelihood of further price drops will hamper sales volumes in the private housing market, especially of resale homes, said DTZ.
The report highlighted the government’s reluctance to relax the property cooling measures at this stage, buyers continuing to adopt a wait-and-see approach and rosier investment opportunities abroad as some of the reasons keeping buying interest down.
Within the secondary market, although some units have been priced more realistically, there are sellers looking to hold off until market conditions are more favourable.
On the other hand, demand for new homes is expected to hold up better as developers have more options to promote projects strategically and creatively to attract buyers.
“As the past quarter has shown, projects that are well-located and priced affordably should continue to see moderately healthy interest going forward,” the report said.
But sales rates are not expected to hit pre-TDSR levels due to the smaller pool of buyers and financing concerns.
As a result, developers will remain cautious and some may slash prices to move units. New projects will also be launched selectively, or in phases, to test market reaction.
DTZ predicts that launches for the whole of 2014 will offer less than 10,000 units, a sharp decline from the 15,885 units released last year and the 21,478 units in 2012.
The consultancy also believes total transaction volumes this year will fall far short of the annual average recorded in the past five years, which was buoyed by global flows of easy liquidity following the global financial crisis.
“Transaction volume is likely to be comparable to the levels seen in the pre-GFC period, which could be viewed as a healthy correction for the residential market, assuming economic conditions do not change.”
Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, wrote this story.
