But rate of decline is easing; attention shifts to mid-tier and high-end homes
The number of new private homes sold in November fell 26 per cent month-on-month to 600 – the fourth straight monthly fall since July’s peak.
November sales were also the lowest since January, when just 108 units were sold.Analysts say the month by month decline is due to cooling interest among mass-market buyers – typically HDB upgraders – as prices in this segment have climbed since the second quarter.
In November, just 27 per cent of all units sold were in the outside central region (OCR) – a proxy for suburban mass-market locations. The OCR also accounted for only 21 per cent of launches in November.
In contrast, 60 per cent of the homes sold were in the core central region (CCR) which includes the prime districts, financial district and Sentosa Cove. Sales in the CCR more than doubled from 152 in September to 362 in November.
Data from the Urban Redevelopment Authority also shows that the CCR accounted for 73 per cent of units launched last month as developers tried to cash in on returning interest in the high-end segment.
‘With a lack of new mass-market offerings, attention in the month turned towards the mid-tier and the high-end,’ said DBS Group Research analyst Adrian Chua. ‘Things were more interesting at the mid and high-end.’
Attractive prices in the high-end segment also helped.
‘Strong buying sentiment in this sub-market (the CCR) is mainly supported by affordable prices compared with the previous peak in 2007, especially developments with good specifications and prime strategic locations,’ said Chua Yang Liang, Jones Lang LaSalle’s head of research for Southeast Asia and Singapore.
In fact, the private residential property market has again become an investors’ market, as upgraders start to stay away.
PropNex chief executive Mohamed Ismail said that while upgraders are cautious, serious investors are buying with confidence, picking up properties in good locations mostly in the $1,500-$2,500 per square foot range.
An analysis by Savills Singapore showed the average unit price fetched seems to have risen.
In October, 78 per cent of units sold were in the $750-$1,000 and $1,000-$2,000 psf price bands. But in November, 73 per cent of units sold had moved up one price band to between $1,000-$2,000 and $2,000-3,000 psf.
‘This translates to a remarkable increase of 106 more units sold at the higher price band of between $2,000-$3,000 psf,’ said Christine Sun, Savills’ senior manager for research & consultancy.
The best-performing project in November was Ho Bee’s Parvis at Holland Hill, with 103 units sold at a median price of $1,507 psf. Next in line was the high-profile Marina Bay Suites by Keppel Land, Hongkong Land and Cheung Kong, in the upcoming Marina Bay Financial Centre, where 87 units were sold during a one-day private preview at a median price of $2,159 psf. Six whole floors were reportedly sold to Singaporeans and Singapore permanent residents from Indonesia and other Asian countries.
Another high-end project that did well is Novelty Group’s Espada at St Thomas Walk, which sold 61 units at a median price of $2,322 psf.
The market also appears to be nearing its bottom, analysts say. While November marked a fourth monthly fall in transaction numbers, the rate of decline seems to be slowing.
The month-on-month fall from October to November was 26 per cent, down from a 29 per cent fall from September to October and a 37 per cent fall from August to September.
In the 11 months from January to November, a total of 14,243 units were sold, just 568 fewer than the the 14,811 units sold at the peak of the market in 2007.
‘We believe sales will continue to taper off into December and also on a year-on-year basis into 2010, when we expect around 8,000 to 10,000 units to be sold,’ said DBS’s Mr Chua. ‘We also expect a greater percentage of sales in 2010 will come from the high-end segment.’
CB Richard Ellis likewise expects take-up in 2010 to moderate to 8,000-10,000 units, and reckons prices could rise 5-10 per cent.
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