Signs of a cooling in Singapore’s red-hot property market, which has seen double-digit falls in new home sales, do not have analysts concerned – they expect the real estate sector to remain resilient this year thanks to strong demand from a growing population and low borrowing rates.
New private home sales plunged for a second month running in June, dropping 19.4 percent month-on-month to 1,372 units, after falling 31.6 percent in May from April.
“The softening in demand was caused by fewer launches of large projects in recent months. In Singapore, supply creates demand. If you build, they (buyers) will come,” said Alan Cheong, research head at Savills Singapore. He said that in the second quarter, although 14 major projects were launched, only one was of a large scale.
According to Cheong, the recent decline in sales is unlikely to have a material impact on property prices and buying is likely to pick up with a slew of major launches scheduled for the second half of the year.
Analysts say that property prices in Singapore will remain supported as long as 1500 units are sold per quarter. They add that the last time new home sales dropped below this level was during the fourth quarter of 2008, when only 419 units were sold.
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