After a seven-month run seeing 62 collective sale transactions in Singapore, August turned up only one, and many blamed the subprime mortgage woes in the United States for turning off the tap.
'The US credit crunch has cast some level of cautiousness and uncertainty in Singapore's residential property market,' said Tay Huey Ying, director of research and consultancy at Colliers International.
'Banks are now more cautious when assessing home mortgages, and the ability of borrowers to pay is paramount. Sale activities in the residential property market have slowed down somewhat as the volatility in the financial market had compounded the soft demand traditionally seen in the month of the Hungry Ghost [Yue Lan] festival, in which home purchase is considered inauspicious for the Chinese,' she said.
Ms Tay added that Colliers held the view that such a cautious mood was likely to be temporary and the confidence level would return once the US credit crisis blew over.
CB Richard Ellis stated that a sustained rout in the local stock market because of the sell-down on Wall Street would likely dent sentiment in the Singapore property market. But there could also be a more direct hit if the US crisis dries up some of the liquidity that has been powering the local real estate sector's sparkling recovery.
City Developments (CDL) executive chairman Kwek Leng Beng said in early September, 'There is still plenty of liquidity around.'