Developers have lowered asking price to bring in buyers

Dive in property launches

Developers have lowered asking price to bring in buyers

Friday • May 16, 2008

Esther Fung
esther@mediacorp.com.sg

Singapore's much-anticipated property market slowdown is here.

April saw a 58-per-cent dive in new property launches by developers as buyer sentiments soured.

According to data released by the Urban Redevelopment Authority (URA) yesterday, developers put 271 new private homes on sale last month, down from 642 in March.

Sales dropped by another 13 per cent with just 279 homes changing hands across Singapore, down from 322 in March. This is a sharp contrast to the 1,885 units launched and 1,731 sold at the peak of the housing boom last August.

"There is still a bit of a stand-off between developers and buyers," said DTZ Debenham Tie Leung's senior research director Chua Chor Hoon.

"Buyers are still taking a wait-and-see approach as they are not sure how things are going to unfold. It doesn't make sense for them take the plunge and buy unless they have a strong reason to."

To lure buyers, some developers have lowered the asking price.

According to Mr Nicholas Mak, a director at Knight Frank, the median prices of new sales dipped 8.9 per cent to $943 per sq ft (psf) last month.

The URA does not release monthly changes in price statistics. Its last set of figures shows private home prices rose 3.7 per cent in the three months to end-March, albeit at a slower pace.

Mr Colin Tan, head of consultancy and research at Chesterton International, said: "The evidence is mounting that the market may reached a declining stage."

The asking price has been dropped in some new developments such as Far East Organisation's The Lakeshore in Jurong West and World-Class Capital's Blu Coral in Telok Kurau, which has resulted in higher sales.

Buyers snapped up 18 units in Blu Coral — up from nine in February — after its median price fell to $657 psf last month.

"The question is, can they sustain sales at this price level or do they have to continue to lower it further," said Chesterton's Mr Tan.

City Developments has held back its property launches so far this year, but may launch this year's first new development in the second quarter or third quarter if market conditions permit, its executive chairman Kwek Leng Beng told Dow Jones Newswires.

GIC Real Estate president, Dr Seek Ngee Huat, yesterday warned that Wall Street's credit crisis may flow into Asia's "main street".

"The contagion of the sub-prime crisis can potentially accelerate the downward spin of the cycle," Dr Seek was quoted as saying by Bloomberg.

"Its ripple effects are certainly being felt here in Asia. While Wall Street is picking up the pieces, the problems on Main Street are just beginning."

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