* Lowest number of homes sold since January 2009
* Few new property launches
* Sales seen falling in 2014
(Adds milestone, background on developers)
By Brian Leonal and Anshuman Daga
SINGAPORE, Jan 15 The number of private homes
sold by developers in Singapore in December fell more than 80
percent from a year earlier, with the property industry bracing
itself for a tough 2014 as a series of government measures to
cool the market start to bite.
With developers putting few big new projects on to the
market and potential buyers hampered by rules limiting how much
they can borrow, only 259 units were sold last month in the city
state, the lowest number since January 2009, according to
figures from the Urban Redevelopment Authority (URA).
Governments across Asia have been trying to cool their
property markets following three years of strong price rises
triggered by low interest rates brought about by quantitative
easing in developed countries.
Signs are emerging that those efforts are starting to make a
significant impact, with figures last week showing property
sales in Hong Kong hitting a 17-year low.
In Singapore, where private property prices have risen by
around 50 percent since 2009, analysts said they expect home
sales to remain muted for most of this year.
"Assuming that the current cooling measures and lending
rules are in place, the total number of new developer sales are
expected to be at least 30 percent lower compared to last year's
developer sales," said Alice Tan, head of consultancy and
research at Knight Frank Singapore.
However, analysts cautioned that fears the city-state was on
the verge of a major correction in its property and credit
markets are overdone.
"What happened for this year is that there was a sprint in
the first half, and now it is slowing down to take a breather
after the measures came in," said Desmond Sim, Head of Research
at CBRE, who expects between 10,000 to 12,000 property units to
be sold in 2014 compared with just under 15,000 this year.
On Tuesday, Singapore's central bank said in a statement it
believed the country was not at risk of a credit bubble and the
property market was stabilising in response to a column on the
Forbes website predicting the city-state was heading for an
Iceland style meltdown. Economists backed their view.
"While comparing Singapore to Iceland makes for attention
grabbing headlines, the bottom line is that both countries have
very different macroeconomic fundamentals," said Credit Suisse
economist Michael Wan.
PRICES ON THE SLIDE
Earlier this month, figures showed private home prices fell
in the fourth quarter of 2013, the first decline in almost two
years and analysts expect the downward trend to continue at a
In a report titled "Slow Grind" and published ahead of the
release of property data, CLSA forecast a drop in Singapore
property prices this year of around 5-10 percent.
"Low inventory among developers and strong household
balance sheet will mitigate a sharp correction in our view with
government intervening to ease policy measures as another price
support," the report said.
Singapore property stocks took a beating last year as the
impact of strict government measures affected the sector.
Tougher rules for bank financing have hit buyers and property
developers are offering steep discounts to boost sales.
Last year, property and hotel company, City Developments Ltd
was the worst performer in the benchmark Straits Times
Index, with its shares plunging by about 25 percent as
investors braced for a weak market.
Singapore's real estate index fell 9.7
percent last year and was the second biggest sector loser after
jumping 48 percent in 2012.
Since 2009, the Singapore government has introduced eight
rounds of cooling measures intended to prevent a property bubble
In June last year, new rules came in to ensure that a
property buyer's monthly payments do not exceed 60 percent of
his or her income, a move aimed at making sure home owners are
not caught out when interest rates start to rise.
Private homes in Singapore house around 20 percent of the
city-state's 5.3 million population, with the rest living in
(Reporting by Brian Leonal and Anshuman Daga; Additional
reporting by Laura Philomin; Writing by Rachel Armstrong;
Editing by Jacqueline Wong)