Private home sales strong

Source : Straits Times – 16 May 2009

SALES of new private homes continued to boom in April, almost matching the frenetic pace of activity set in both February and March this year.

Some 1,207 units were sold during the month as more were launched by developers keen to take advantage of increased buying momentum, partly fuelled by stock market rises. This compares with sales of 1,220 units in March and 1,332 in February.

Last month, developers launched 1,083 new homes, up from 832 in March, according to data released yesterday by the Urban Redevelopment Authority.

The latest figures mean that developer sales for the first four months of the year equate to around 88 per cent of all such sales last year. The two best-selling projects in April were Mi Casa in Choa Chu Kang and The Arte in Jalan Datoh. Buyers picked up 115 units of Mi Casa at a median price of $639 per sq ft (psf), while 110 units of The Arte were sold at a median price of $903 psf.

Suburban projects remained the most popular. Some 523 suburban units were sold during the month, down from 559 units in March and 840 in February.

In April, the lowest-priced non-landed deal was in Bayou Residence, where a unit with a rooftop garden was transacted at just $300 psf.

The month saw increased launches and sales activity in the core central region. Some 339 homes were launched there – five times the 70 units in March and the most since September 2007.

Certain prime projects with median prices from $1,156 psf to $1,703 psf were popular with buyers, said CBRE Research. It pointed out that projects such as the sold-out 72-unit Illuminaire On Devonshire, RV Suites and Attitude At Kim Yam were successful because of the low absolute quantum price per unit – they comprised mostly small-format units of 330 sq ft to 720 sq ft.

Ms Jacqueline Wong, head of residential at Jones Lang LaSalle, said: ‘Buying appetite is returning for new developments that are reasonably priced. For example, Verdure by Bukit Sembawang on Holland Road, with a median price of $1,416 psf, roughly translates to below $2 million for a home in Holland Road.’

Said Mr David Neubronner, executive director, residential at Credo Real Estate: ‘The perception of the market is changing. Certain quarters feel that prices may not go down very much from current levels. Some new launches this year started selling at slightly lower prices to soak in demand, but they are now raising their prices by a little.’

Still, some of those who launched earlier at higher prices continue to cut.

Yesterday, CapitaLand released 100 units at the 999-year leasehold The Wharf Residence off Mohamed Sultan Road at $1,300 psf to $1,600 psf. To entice buyers, it is waiving stamp duty and offering interest absorption. Prices are down from a range of $1,429 to $1,708 psf in the third quarter of last year.

CBRE Research executive director Li Hiaw Ho said: ‘Based on the price range of the units sold in April and May, we are seeing a stabilisation of prices in contrast with the 14.1 per cent quarter-on-quarter record decline in the first quarter.’

However, while the mass and mid-markets have found their equilibrium, high-end developers may still have to lower prices if they want to sell now, said Mr Neubronner.

Property experts warned that April’s pace is unlikely to be sustained, given that Singapore remains in a recession.

‘Many homebuyers are purchasing new homes in the hope that the property market would recover shortly,’ said Knight Frank director of research and consultancy Nicholas Mak.

Mr Neubronner added that prices could possibly hover around current levels for the next 12 months.

Dr Chua Yang Liang, head of research, South-east Asia, at Jones Lang LaSalle, added: ‘Until there are clear signals of a stabilisation and underlying positive growth in the real economy, the residual pent-up demand alone cannot be expected to lift the residential market in the long term.’