August homes sales slow in Singapore

New private-home sales by developers in Singapore remained subdued in August, with the timing of the Hungry Ghost month further curbing demand already hurt by the government's latest property cooling measures.

According to the latest data from the Urban Redevelopment Authority, Singapore developers sold 742 private homes in August, up from 482 flats in July but well below the monthly average of around 1,800 flats last year.

Developers in Singapore sold 1,427 private homes in August last year.

Including executive condominiums, a category of apartments aimed at middle-income Singaporean families, developers sold 1,468 flats in August, about 21/2 times the 594 flats sold in July.

According to Chinese tradition, the ghosts of the departed visit the earth during the Hungry Ghost month, which is based on the lunar calendar. Some buyers tend to avoid the property market during this period. The Hungry Ghost month started on August 7 this year, earlier than in 2012 when it began on August 17.

Buying interest in Singapore private homes, which house around 20 per cent of the city state's 5.3 million people, weakened sharply in July after the central bank introduced rules to ensure that the buyers' monthly mortgage payments do not exceed 60 per cent of their combined incomes.

The latest measures, introduced on June 28, were aimed at ensuring property would not be caught out by a rise in interest rates, the Monetary Authority of Singapore said. It estimates between 5 and 10 per cent of borrowers "probably overleveraged on their property purchases" based on their total debt service payment ratio of more than 60 per cent of monthly income.