New private home sales ‘could fall to 18-year low’

Many of last month’s 192 sales were made at just five developments

ONLY 192 new private homes were sold last month, sparking concerns that total sales this year could plunge to levels not seen since 1990.

CBRE Research tips a total sales figure of around 4,300 units - a striking plunge from the boom last year when a record 14,811 new private homes changed hands.

If the projection pans out, private home transactions this year will be the lowest in 18 years when 2,526 units were sold in 1990.

And there is not much cheer on the horizon either with the ’sluggish sales momentum’ likely to persist as the economy is expected to weaken further, said CBRE Research executive director Li Hiaw Ho.

The Urban Redevelopment Authority (URA) data yesterday showed that last month’s sales were up slightly on the 118 units shifted in October but down from September’s 376.

The latest numbers add up to 4,200 private homes sold in the first 11 months.

Sales at a few projects held up reasonably well, probably due to competitive pricing, say experts. Developers launched 382 units for sale last month - up from 159 in October when the market was in shock - but half the 767 units launched in September. It was also below the 12-month average of 541 units, said Knight Frank.

‘The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote,’ said its director of research and consultancy Nicholas Mak.

Many sales were made at just five developments with many projects not attracting a single buyer. Last month’s top seller was Rosewood Suites in Woodlands, a 99-year leasehold project that moved 42 units at between $512 per sq ft (psf) and $687 psf.

Two prime projects also did relatively well. Newton Edge sold 34 units while 19 went at RV Suites in River Valley Road.

Mr Li said the two have mostly small units, which help contain the absolute price at $550,000 to $900,000 per unit, based on their median prices of $1,201 psf and $1,350 psf respectively.

Buyers snapped up 15 units at Evania in Upper Paya Lebar at between $612 psf and $650 psf after prices were apparently cut from above $800 psf at the launch in March last year, said Mr Li. ‘Price remains a critical factor to move sales, as seen by the good response.’

And 11 houses at Andrews Terrace, a project in a new landed estate called Sembawang Greenvale, sold at prices starting from $1.3 million each.

Suburban homes accounted for 53 per cent of developers’ sales last month, which shows that there is a pool of genuine buyers out there, said Ms Tay Huey Ying, director for research and advisory at Colliers International.

But prime properties dominated last month’s launches. Developers have stepped up releases since August, a reversal of the first-half trend when they held back prime homes, she said. ‘This could be an indication of weakening holding power among smallish and mid-tier developers with prime development sites.’

Homebuying sentiment and launch activity should remain subdued in the month ahead as the economy further contracts and the employment market is anticipated to tighten further, said Mr Mak.

‘Buyers will remain very cautious, even if some re-pricing sets in.’

WEAK SENTIMENTS REMAIN

‘The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote.’ - Knight Frank’s director of research and consultancy Nicholas Mak

Source : Straits Times - 16 Dec 2008