Robust private home sales in June

Source : Business Times – 30 Jun 2009

But it is too early to call a recovery, cautions OCBC Investment Research

Private home sales stayed strong in June.

Far East Organization sold 74 apartments in its 280-unit Vista Residences at a private preview last weekend, the developer said yesterday.

And Frasers Centrepoint said that it has fully sold two of its projects – the 330-unit 8@Woodleigh and the 110-unit Woodsville 28. Homes at 8@Woodleigh went for an average of $790 per sq ft (psf), while units at Woodsville 28 sold for an average price of $775 psf.

8@Woodleigh was launched just two weeks ago. Woodsville 28 was launched in July 2008 but most units languished until the buying momentum returned to the market this year.

Over at the freehold Vista Residences – on Jalan Dusun and Jalan Datoh at the corner of Thomson Road – prices start at $960 psf. The project will be officially launched tomorrow, but Far East released 88 units at a weekend preview, and 85 per cent of them were snapped up.

‘Buyers are mainly Singaporeans and there is particularly strong interest from young professional managers, teachers and civil servants who are buying to occupy,’ said Chia Boon Kuah, chief operating officer of Far East Organization’s property arm.

While units at Vista Residences have sold for more than homes in the nearby The Arte – a City Developments project where units were launched at an average price of $880 psf in March – the difference in pricing is due to the difference in unit sizes and floor plans, analysts say.

‘Vista Residences offer smaller size units that command higher psf pricing and also smaller balcony space than The Arte,’ OCBC Investment Research analyst Foo Sze Ming said in a note yesterday. ‘As such, we caution that the strong buying momentum at higher psf pricing for the new launch should not be viewed as a new uptrend for property prices.’

Mr Foo said that it is too early to call a recovery in the property market. ‘We remain unconvinced by the recent ‘recovery’ in the physical property market,’ he said.

‘We believe buying strength over the recent weeks could have been driven by the spillover effect from earlier pent-up demand that drew cash rich local investors back into the market. In our view, potential catalysts for price increase will have to come from an inflow of foreign funds into the property market, as well as a pick up in employment opportunities.’

Foreign funds were the driving force of the property boom in 2007, but have not come back to the market in a big way.

Looking ahead, more mass-market and mid-market launches are expected in the coming weeks, including Oasis@Elias, a 388-unit, 99-year leasehold project at Elias Road by Chip Eng Seng, and The Gale, a 329-unit, freehold project at Flora Road by Tripartite Developers.