Property market remains resilient despite school holidays, Latest Business News - The New Paper

Property market remains resilient despite school holidays

This article is more than 12 months old

Demand for new homes in June - typically a slow month in the Singapore property market due to the school holidays - appeared resilient although developers sold fewer units.

Analysts noted that last month's 13.8 per cent drop in sales from May was not as weak compared with the same month-on-month period in recent years.

Figures released by the Urban Redevelopment Authority yesterday showed that, compared with a year ago, sales last month rose 25.5 per cent to 821 from 654 units booked last year. Including executive condominiums, developers moved 822 units.

Some 670 private homes were launched last month, down nearly 52 per cent from 1,394 in May, and down 7.7 per cent from 726 units a year ago.

But with Singapore's second quarter (Q2) economic growth slumping to its worst showing in a decade, some analysts warned that buying sentiment could sour quickly if there is an external shock, or if the economy continues to worsen in the coming months.

"The question is whether there will be a real recession, how deep is the recession, and whether it will adversely affect the overall investment sentiment for risky assets," ERA Realty head of research and consultancy Nicholas Mak said.

The poorer-than-expected Q2 gross domestic product growth will definitely add more anxiety over job stability, but for now, the job market is still healthy and the interest rate environment is benign with more cuts expected, Ms Christine Li, head of Singapore and South-east Asia research at Cushman and Wakefield, said.

"Sales momentum will (likely) continue in 2H 2019 due to ample liquidity. Nevertheless, competition among new launches has heated up and developers are trying to price projects more favourably," she added.

Mr Ong Teck Hui, JLL's senior director of research and consultancy, said the private residential market has been resilient so far.

"Although analysts warned about the possibility of a technical recession, a full-year recession is not expected. Buyers may be more cautious but unlikely to be kept off the market," he said.