New private home sales up 9.4% on-month in June

Source : Channel NewsAsia – 15 Jul 2009

Sales of uncompleted private homes continued to climb in June as improving sentiment in the market spurred homebuyers to snap up more units. 1,825 new private homes were sold last month – a 9.4 per cent rise from May.

The strongest sales were seen at 8@Woodleigh, a condominium at Potong Pasir, where units were sold at a median price of S$804 per square foot. All 330 units at the property were snapped up last month, accounting for almost a fifth of all private home sales.

Market-watchers said on Wednesday that June’s record private home sales were largely driven by pent-up demand, with one in two buyers being upgraders from the public housing segment.

Chua Yang Liang, head, Research & Consultancy, Jones Lang LaSalle, said: “The gap between these two markets right now is at a historical low of about 58 per cent – the peak was 67 per cent. The large liquidity that was built up over the past few years is also driving the market.”

Observers also noted that buyers are getting more interested in high-end apartments.

Martin Place Residence, Nathan Residences and Vista Residences, which are in the prime districts and city fringe areas, all sold between 60 and 90 units each. Median prices for these units ranged from S$1,047 to over S$1,500 per square foot.

One Devonshire, located at River Valley, sold 146 units at a median price of S$1,771 per square foot.

But some warned of signs of speculation and said a property bubble would be formed if buying is not supported by fundamental growth.

Tay Huey Ying, director, Research & Advisory, Colliers International, said: “The investors have been drawn out in a big way from the sidelines and this is on the back of home prices that remained largely at a discount, compared to the peak prices.

“I think there is a little bit of froth forming in the market at this point in time, we are seeing speculators coming back into the market although… the level of speculation has not reached a level that warrants concern.”

Developers launched a total of 1,637 units in June, up 41 per cent from May.

Going forward, developers are expected to launch more mass market and mid-tier properties with marginal upturn in prices.

Market-watchers said the good sales momentum may be sustainable at between 1,000 and 1,200 units a month for the rest of the year. But they said sales volume may dip slightly in September due to the Hungry Ghosts’ Festival.

With Singapore snapping out of technical recession in the second quarter, observers said this may inject more confidence in the property sector.

Overall, 7,310 units were sold in the first half of the year, surpassing the over 4,200 deals for the whole of 2008.