SINGAPORE (Nikkei Markets) -- Developers in Singapore sold more homes in August compared to July in yet another sign of the recovery in the city-state's property market, bolstering expectations that prices are headed upward.
The gains came despite the start of the month-long Hungry Ghost festival in the third week of August, a period when home buyers tend to stay away from the property market.
Sales in the month, which totaled 1,241 units according to the Urban Redevelopment Authority, also exceeded the 774 new units launched, further reducing the inventory of unsold homes.
The August sales figure represents a 12% increase from July's revised total of 1,111 units and is more than double the 468 units transacted in the same month a year ago.
Singapore's residential property market has shown signs of bottoming in recent months amid a jump in apartment sales and as developers bid aggressively at government land auctions.
URA has previously said that private home prices fell 0.1% in the second quarter from the first three months of the year, the smallest quarterly decrease since prices started falling three-and-a-half years ago as sentiment took a hit from government cooling measures.
Just days ago, the Singapore Real Estate Exchange said resale prices of existing private residential apartments rose 0.7% in August from July as the number of transactions increased 19% on month to 1,273 units.
Commenting on Friday's data, PropNex Realty, Singapore's largest real-estate agency, said the new private homes segment performed well in August considering that just one development was launched in the month.
"Buyers are more prepared to pick up existing projects that are rightly priced, fearing that prices might increase by more than 10% come next year, with the recent aggressive land bids from recent land sales," said CEO Ismail Gafoor.
The total number of units sold in the first eight months of 2017 has also surpassed the number for the whole of 2016, "illustrating the positive momentum and greater activities in the segment," PropNex added.
CBRE, a property services firm, added that home prices are unlikely to stay at current levels, given the rise in land prices to levels last seen four years ago before the market began to soften.
However, any price movement is likely to take place after September, when the Hungry Ghost month could impact sales volumes.
The government recently raised the charges for developers planning to build new apartments on existing sites, in response to a spike in the number of collective sales whereby home owners group together to sell the entire housing complex.
Such transactions are favorable to home owners since they typically receive a much higher price for their apartments than if they sold individually, while developers benefit since they can take advantage of increased height limits and plot ratios to build more units on the site.
DBS Vickers, a stockbroker, said the higher development charges would moderate the pace of collective sales, which tends to boost the activity in the housing market since many owners would have to look for new homes even as supply is reduced as the sites are redeveloped.
But the broker remains positive on the Singapore property market, and recommended City Developments and UOL Group as key proxies for the expected recovery.
According to URA's data, the top selling condominium project in August was "Le Quest" in western Singapore, whose developer is a unit of Chinese conglomerate Qingjian Group.
The other top selling projects include Sol Acres, an executive condominium project by a unit of Hongkong Land Group, and Commonwealth Towers by Singapore property giant City Developments.
Executive condominiums, or ECs, are a class of apartments that can only be purchased by locals. Including these ECs, private developers sold 1,581 units in August compared with 2,091 units in July, according to URA.
About 80% of Singapore residents live in government-built apartments, leaving developers to cater to the remaining one-fifth.