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New Private Home Sales in Singapore Dropped Over 50% in October


Source: www.businesstimes.com.sg


After 5 months of record sales, new private home transactions in Singapore plunged in October with a drop of 51.7 per cent against the previous month. According to data from the URA released on 16 November, there were only 642 units sold in October, a decrease of 687 units compared with the 1329 units sold in the month of September. The 642 units sold in October were also lower than the sales recorded in October 2019, with 932 units sold then.


The main reason for the sudden drop is due to new curbs that were imposed by the URA. On September 28, the URA restricted developers from re-issuing OTPs to the same buyer of the same unit, within 12 months after the expiry of the earlier issued OTP. Developers are also restricted from providing upfront agreements to buyers to re-issue OTPs.


The new curbs were made to ensure that buyers commit to a property purchase only when they are financially ready to exercise the OTP within the validity period. It will also encourage financial prudence when purchasing a property as Singapore is facing a economic slump and a uncertain employment climate due to on-going COVID-19 pandemic.


Before the new curbs were introduced, OTPs could be re-issued through an arrangement some private home buyers make with a developer, via a property agent, without forfeiting the booking fee. This arrangement also gives the buyer more time to sell his existing home. The segment of the market especially affected by the new curbs are the HDB upgraders as these are buyers that must sell their HDB flat first, and then rent a home while waiting for their new private home to be ready. New projects usually are ready for moving in only 3 years after the sales launch.


The other factor attributed to the sharp fall was the lack of new project launches with “Hyll on Holland,” the only new project launched. There were 423 new units launched for sale in October, a drop of almost 69% or 917 units, compared with 1,340 new units launched for sale in September. This is the lowest number of new units launched for sale since December 2019. Even during the circuit breaker imposed in April and May, there were more new units launched for sale with 640 units and 615 units respectively.


The top selling projects for the month of October were The Garden Residences (53 units), Treasure at Tampines (50 units) and Parc Clematis (49 units).

However, industry experts expect new homes sales in November and December to do better than last month, with the upcoming launch of several new projects, including the Linq@Beauty World, The Landmark, Clavon, and Ki Residences.


Another factor that would help new home sales do better could be the formation of Air Travel Bubbles (ATB) that will allow overseas investors to travel to Singapore. The first ATB between Singapore and Hong Kong might nudge more Hong Kongers towards buying properties here.


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