Calmer home sales pace likely in 2010

Source : Sunday Times – 29 Nov 2009

The unusual frenzy in private home sales till September this year is fast winding down, as launches slow.

It should be a short lull before new launches kick in from late February, after Chinese New Year. Next year, however, is expected to see a steadier and calmer pace.

And, unlike this year, more high-end launches are expected next year, experts said.

DTZ head of South-east Asia research Chua Chor Hoon expects sales activity to remain low for next month and early next year.

This is because there are few mass market projects being launched in the next few months.

Recent government cooling measures seem to have had an effect too, making home hunters and speculators more wary about wading in, she said.

The property market will likely pick up only after Chinese New Year in mid-February next year, said Knight Frank’s executive director (residential) Peter Ow.

Apart from the high-end launches next year, home hunters can expect several large projects including those on sites that were sold en bloc during the previous boom, experts said.

These include the site of Minton Rise condo in Hougang; a site in Dakota Crescent, near Old Airport Road; and a project in Yishun.

The 99-year Minton Rise project will have at least 1,000 units of various sizes while the Dakota Crescent site, also a 99-year project, may have around 600 units.

In Yishun, MCL Land has a launch-ready 608-unit project a 10-minute walk from the Khatib MRT station.

Prices for this 99-year condo, which offers a view of Lower Seletar Reservoir, could well be above $700 per sq ft (psf), an industry source estimated.

Other likely non-prime projects in the first half of next year include the collective sale sites of Flamingo Valley in Siglap and Rainbow Gardens in Toh Tuck Road.

But one industry source said it is the high-end market that will be interesting to watch.

Next year, developers are expected to start pushing out their high-end projects for sale, after a year with no major luxury launches. ‘Buyers will have a lot of choices so they should be selective,’ the industry source said.

Possible new prime launches include the condo on the former Parisian site in Orchard; The Laurels as well as Urban Resort in Cairnhill; Ardmore III and the new condos on Pin Tjoe Court and Anderson 18 sites in Ardmore Park.

Some of these en bloc sites were kept for lease as the developers rode out the downturn.

While mass market home prices have since peaked, high-end prices have not reached the previous high of $4,000 psf to $5,000 psf.

Today, there is still little demand for homes priced beyond $3,000 psf, sources said.

Affordability has been a key issue in the past year, such that many developers reconfigured their projects to have smaller units in general in order to keep absolute prices low.

MCL Land, for instance, reconfigured its Yishun project to allow for more small units.

Most new launches next year would still have small units in general, said Mr Ow.

Third-quarter data shows that these small units of 500 sq ft and below remained popular, with sales totalling 253 units, up from 102 units in the same period a year ago, according to data from DTZ.

They form about 2.7 per cent of total transactions this year, compared to 3 per cent last year, and just under 1 per cent in 2007.