The number of property subsales - an indicator of speculative activity - appears to be stabilising, possibly even falling.

The number of property subsales - an indicator of speculative activity - appears to be stabilising, possibly even falling.

Some industry players even believe that this could mark the beginning of more stable prices in the months to come.

Official property statistics for the third quarter will not be out until next month but monthly figures tabulated by CB Richard Ellis show a surprising dip in the number of subsales between the months of June and July.

The July figures will be updated in time but the drop is still likely to be an estimated 5-10 per cent. This comes after numbers that have been rising consistently for the three months in the second quarter of 2007.

One explanation for this could be that the window of opportunity for speculators is closing, with prices in the highend sector peaking.

CB Richard Ellis executive director Li Hiaw Ho said: ‘If you don’t have sharp increases in prices, you don’t have property speculation.’

Speculators could also be discouraged by the volatility in the global markets. ‘Because of the sub-prime crisis, a lot of buyers are exercising caution,’ said Mr Li.

Another indication that speculators could be cooling off is that the number of returned options to buy new condos also appears to be dropping.

In January, the high-profile launch of One Shenton attracted many punters hoping to flip units before exercising their options. And even though it was fully booked within days of the launch, industry watchers believe that as much as 15-25 per cent of the options were returned in the following months when speculators failed to get their target prices.

Since then, there have been several more high-profile launches. Among the most notable ones were Orchard Residences - which has since set the record for the most expensive property in Singapore at $5,500 psf - and Scotts Square.

Both developers declined to reveal the number of options returned. But persistent talk in the market has it that ‘many’ options were returned for Scotts Square.

A source said that the figure was closer to about 5-10 per cent, which in comparison is perhaps not as high as might be expected for such a prime location.

CapitaLand’s Seafront on Meyer was launched in Q2 and saw queues of buyers forming at its showflat. Now 80 per cent sold, CapitaLand said that only 3 per cent of the options were not exercised.

One Rochester, another hot property launched in Q2, also saw queues at its showflat. Developer United Engineers Ltd (UEL) said that it was surprised that only 10 per cent of the options for the fully sold condo were returned.

UEL CEO and group managing director Jackson Yap said: ‘Initially, we had some concerns about the number of returned units as the option period coincided with the sub-prime crisis. We are rather happy that the number of returned units eventually stabilised at 10 per cent, which reflects a high proportion of genuine buyers who are confident of the strong fundamentals of the development.’

Speculators are very much a part of the market and do actually have a function as they help set the threshold prices that buyers are willing to pay.

UEL’s Mr Yap added: ‘We are in no urgency to sell the returned units, although there is a waiting list of genuine buyers, in this current market. We have more than covered our costs through the rest of the sales, and feel there is a need to protect the selling prices for a high-quality development like ours.’

One Rochester was sold at a price ranging between $900 psf and $1,600 psf. Whether these prices will go up could depend on how gung-ho speculators will be in the coming months.

The Soleil at Novena was launched last month and is almost fully sold. Developer UOL said that to-date, 42 per cent of its buyers have exercised their options. The remaining 58 per cent have until the end of the month to exercise theirs.