Varying pace of sales at recently released projects

Source : Business Times - 8 Jul 2008

DEVELOPERS selling private homes had a mixed bag of results at the weekend.

The 99-year-leasehold Livia in Pasir Ris, where previews started last Friday, has chalked up relatively strong sales of 160 units at an average of $650 per square foot (psf).

But sales were slower for most other recently released projects.

At Kovan Residences, another 20-plus units were sold at the weekend, taking total sales to more than 80 since the 99-year-leasehold project next to Kovan MRT Station was previewed at a private party on June 28.

The average price is between $870 and $900 psf.

Riding on the buying interest in Kovan Residences, MCL Land accelerated the preview of its 50-unit D’Pavilion, a freehold condo on Upper Serangoon Road slightly further away from Kovan MRT. It sold 10 units on Saturday and Sunday at an average price of $900 psf.

In Bishan, Sim Lian found buyers for another 59 units last week at its Clover by the Park condo, taking total sales to 254 since it previewed the 616-unit project on June 25.

The average price for the 99-year-leasehold project is $750 psf. Sim Lian also sold four units at The Amery in Telok Kurau last week, taking the total to 31 of the 78 units in the freehold development. The average price is $860 psf.

NTUC Choice Homes and Ho Bee Investment sold another 10 units at the weekend at Dakota Residences. The sales tally is 161 for the 348-unit, 99-year condo that is currently selling at an average price of $980 psf.

Commenting on the varying pace of sales, a developer said it is not unusual for transactions to taper off after the first weekend or two weekends of a launch, after initial demand has expressed itself and choice units are taken up.

Another developer said: ‘I think potential buyers are nibbling. If they see a project they like and it’s priced attractively, they’ll go in. But buyers are very price-sensitive.’

Giving his take, a property consultant suggested: ‘I’ve got the feeling these developers may be slowly pushing up prices; so demand has been tapering off.

‘Once a developer has sold at least 30-40 per cent of units in a project, it may be slightly more comfortable with cash flow.

‘It may then be prepared to sell the rest of the project at a slower pace if it can achieve higher prices.’

A more worrying reason could simply be that demand has dropped.

‘People ask themselves: ‘With all the global economic uncertainty, do I really need to buy a new home now?’ said a market watcher.

City Developments Ltd said yesterday that most of the buyers at Livia are Singaporeans, while foreign buyers come from China, Indonesia, India, Malaysia and the Philippines.

Most people bought for owner occupation. The 160 units sold so far achieved prices of between $570 psf and $740 psf.

Prices start from $597,000 for a two-bedroom unit, $793,000 for a three-bedder and $991,000 for a four-bedder.

Hayden Properties starts to preview The Hamilton Scotts this week.

Prices are expected to start below $3,000 psf, though the average price is expected to be around $3,500 psf.

The freehold project comprises 54 apartments and two penthouses.