The fourth and latest round of property-cooling measures  in Singapore seems to have been effective. New private home sales for January totalled 1,189 units, down 11% from the 1,332 units taken up in December, according to data from Urban Redevelopment Authority. Sales of executive condominiums, which have been making a comeback to the market over the past year, were also down 6% in the same period, to 345 units.

“As with previous interventions, the market often responds accordingly, at least over the first few weeks,” says Chua Yang Liang, Jones Lang LaSalle’s head of research for Southeast Asia.

However, he adds that the impact of the measures cannot be fully assessed yet, as the January figures, released on Feb 15, have yet to capture the full month’s data, since the curbs on property speculation came into effect on Jan 14.

Following the latest measures, there were about 30 aborted sales in some of the projects launched in December and January, such as The Tennery, Robinson Suites and Prive EC, according to Li Hiaw Ho, executive director of CBRE Research.

In January, the top-selling projects included MCC Land’s Canberra Residences in Sembawang, with 155 units sold at a median price of S$831 psf; Waterfront Isle at Bedok Reservoir, with 76 units sold at S$980 psf; The Tennery at Bukit Panjang, with 105 units sold at S$1,217 psf; Spottiswoode 18, with 204 units sold at S$1,992 psf; Loft @ Holland, with 41 units sold at S$2,107 psf; and The Vermont at Cairnhill, with 44 units sold at S$2,181 psf.

Two of the EC projects that figured prominently in January were Prive at Punggol, with 217 units sold at S$694 psf, and the Australia-themed Austville in Sengkang, with 95 units sold at S$719 psf.
The top end of the market is also seeing some movement. For example, three units at Scotts Square were sold at a median price of S$4,621 psf; a unit at The Orchard Residences, sitting on top of ION Orchard, went for S$4,258 psf; a unit at The Ritz-Carlton Residences, along Cairnhill Road, was sold for S$3,762 psf; and a unit at Nassim Park Residences was sold for S$3,597 psf.

Despite the drop in sales volume, market watchers still see some positive aspects in the numbers. Christine Sun, senior manager of research and consultancy at Savills Singapore, says the January figures were “better than expected”. She contends that the 11% m-o-m drop — following the fourth round of cooling measures in mid-January — is lower than the 28% m-o-m drop seen last September, following the announcement of the third round of measures on Aug 30.

Li of CBRE is “almost certain” that speculators have all but been weeded out by the latest policy moves. Most of the buyers in January were, therefore, genuine homebuyers, who bought either for owner-occupation or long-term investment, he adds.

The genuine demand in the market bodes well for the “upgrader-type” projects launched in February and expected to be launched in March, such as Chip Eng Seng’s My Manhattan in Simei, City Developments Ltd’s H2O Residences at Sengkang West and Wing Tai’s project at Petir Road. CBRE’s Li expects demand in February and March to be comparable with January’s level and home prices to remain reasonably stable.

Sun of Savills believes the current market sentiment is not about to be dampened easily, as the driving force has been the “phenomenally low” interest rates, coupled with strong economic fundamentals. “A dent in the property market could possibly occur when interest rates start to rise and when the deluge of housing supply enters the market in the next few quarters after the recent government land sales,” she says.

The number of units launched but unsold has also been increasing over the past few months, suggesting that supply has started to outstrip demand. In January alone, the cumulative units launched but unsold hit 4,867, compared with 1,189 units sold. Sun expects this to exert some downward pressure on home prices in the months ahead.

Alex Chan is a contributor to The Edge Singapore

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 847, Feb 28-Mar 6, 2011