Home sales surge on new launches

Source : Straits Times - 17 Mar 2009

Analysts ask if February spike from new heartland condos can be repeated

SALES of new private homes surged dramatically last month to the sort of levels seen in the property boom.

All 293 units at Alexis in Alexandra Road (left) were sold at a median price of $1,083 per sq ft (psf). — PHOTO: THE BUSINESS TIMES

However, some property analysts cautioned that the spike in sales to 1,323 units in February may have been a blip - attributable largely to two popular launches of mid-priced heartland condos.

Still, the new Urban Redevelopment Authority (URA) figures showed that last month’s bumper sales were equal to more than a quarter of all the sales of new private homes last year - 4,264 units.

The February figure is also a huge jump from the dismal 108 unit sales in January as buyers stayed away amid deepening economic gloom and Chinese New Year festivities.

‘It has been more than one year since we last saw total transactions surpassing the 1,000 mark,’ said Jones Lang LaSalle’s local director and head of research, South-east Asia, Dr Chua Yang Liang.

The launch of new units was also up sharply last month, to 1,069 units from just 204 units in January.

Analysts say two newly-launched heartland condos, Alexis and Caspian, proved especially popular with upgraders who had been biding their time amid the sharp run-up in prices during the boom.

All 293 units at Alexis in Alexandra Road were sold at a median price of $1,083 per sq ft (psf) while Caspian in Jurong sold 517 units at a median price of $603 psf. Prices started from $450,000 at Alexis and $340,000 at Caspian.

A third project, originally launched in 2006, The Quartz in Buangkok Drive, sold 168 units last month at a median price of $591 psf after it was relaunched at a lower price. The 99-year leasehold condo was first released at $490 psf on average, which rose to $650 psf in 2007.

Apart from these three, no other project had notable sales. Livia in Pasir Ris launched another 80 units last month, selling just 16 at a median price of $620 psf. A new launch, The Beverly in Toh Tuck Road, offered 31 units last month but sold none. It sold a few this month.

For a second straight month, no units were sold at the decidedly upmarket price range of $2,500 psf to $3,999 psf, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

CBRE Research executive director Li Hiaw Ho said the top three sellers were projects in the heartland, where a majority of the buyers are HDB upgraders.

They have been waiting on the sidelines during the run-up of home prices in 2006-2007, when there was a lack of mass-market projects for sale, he said.

Apart from pent-up demand, consultants said sales at Caspian and Alexis were driven by the availability of small, affordable units - mainly under $800,000.

Private home sales for the January to March quarter could be about 1,800 to 2,000 units, according to Mr Li, going by the ‘brisk sales’ at Double Bay Residences, Suites @ Kembangan and others so far this month. The 646-unit Double Bay in Simei has, for instance, already posted sales of at least 210 units at $600 psf to $650 psf since its March 6 preview.