14,500 new private home sales seen

Source : Business Times – 15 Dec 2009

This is 98% of 2007 record but value of sales this year may be far below 2007’s

CB Richard Ellis (CBRE) has tipped the number of new private homes which could be sold this year at 14,500 – which is 98 per cent of the record 14,811 snapped up in 2007.

But the value of transactions this year is likely to fall far below that of 2007. Just $13.4 billion worth of apartments have been sold to-date – 58 per cent of the $23.1 billion in 2007.

According to the property consultancy, mass-market and mid-tier launches dominated the property market this year, leading to the lower transaction value.

The number of new units sold from these two market segments made up about 60 per cent of the total this year. Popular projects included Caspian at Lakeside, Trevista at Toa Payoh and Meadows@Pierce at Upper Thomson.

In contrast, pricier high-end homes had been the flavour of 2007 – new units sold from the core central region had accounted for 64.2 per cent of the total then.

Not only have more mass-market and mid-tier developments entered the market this year, more small-format apartments have also been released.

CBRE found that in the year-to-date, buyers have lodged 540 caveats for homes measuring 500 sq ft or less, in projects such as The Alexis and Suites@Guillemard. This number was just 221 for the whole of 2007.

As at December, prices of new residential projects in all segments were back at 2008 levels, CBRE said. It cited data from the Urban Redevelopment Authority, which put the median prices of luxury and prime projects at $2,900 psf and $1,660 psf respectively.

Median prices for freehold and 99-year leasehold projects stood at $960 psf and $800 psf in the rest of the island.

CBRE expects private home take-up next year to moderate to 8,000-10,000 units, and home prices to rise by 5-10 per cent.

‘The first half of 2010 will see a wider spread of project launches from mass-market, to city-fringe and to prime locations,’ said CBRE residential executive director Joseph Tan. Prime projects in the pipeline include Ardmore 3 and those on the collective sale sites of Farrer Court, Grangeford, Hillcourt and Parisian.

‘For mass-market and city-fringe 99-year leasehold projects, prices are likely to cross the $1,000 psf barrier because of their near-city location or if they are near an MRT station,’ he added.

In a report last Thursday, DBS Vickers predicted that developers would sell 8,000-10,000 units next year, and property prices would rise 10 per cent on the whole.

‘We believe that this price increase will be skewed to the high-end … prices in the mass-market segment are expected to remain relatively flat, compared to the high-end segment, where we expect a 10-15 per cent year-on-year price appreciation alongside a year-on-year pick-up in transaction volumes,’ said analysts Adrian Chua and Lock Mun Yee.