New private home sales down again

Source : Straits Times – 16 Dec 2009

SALES of new private homes fell in November for the fourth month in a row, following July’s sales peak.

Data released yesterday by the Urban Redevelopment Authority shows that property developers sold just 600 units last month, compared with 815 in October and 1,143 in September.

A whopping 2,772 units were offloaded when the market reached its high point in July.

The dip in sales contrasts with an uptick in launches, with 923 units unveiled last month, up from 570 units in October.

Last month’s continued decline in new private home sales did not surprise property experts, who had predicted a weaker take-up rate because of the seasonal slowdown and the Government’s anti-speculation measures introduced in September.

While low, the sales figure of 600 units is still higher than the 192 units registered for the same month a year ago. And it brings total sales from January to November to 14,243 units – just 568 units short of the 2007 record of 14,811 units.

Like the previous month, November was characterised by no major mass market launches, while landed projects continued to prove a popular market niche, noted real estate company CB Richard

Ellis. Mass market or suburban sales accounted for just 159 units and sales of projects in the rest of the central region or city fringe areas totalled 79 units.

Singapore’s core central region took the lion’s share – 60 per cent of units sold or 362 units. It also had the majority of launches – 671 units.

Last month’s top seller proved to be Parvis in Holland Hill, where Ho Bee launched 130 units and sold 103 of them at a median price of $1,507 per sq ft.

Marina Bay Suites also did well, with 87 units sold at a single-day preview.

Espada in St Thomas Walk managed to achieve higher prices on a per sq ft basis given that it comprised mostly small-format units. One- and two-bedroom homes, ranging from 355 sq ft to 721 sq ft, made up 96 per cent of the 232 units in the project, according to CB Richard Ellis.

Jones Lang LaSalle said November’s sales data suggested that the impact of

anti-speculation measures was felt most keenly in city-fringe and suburban locales, where markets are driven mostly by HDB upgraders who are more sentiment-driven and price-cautious.

While the high-end sector continued to lead the market last month, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak, the climb in sales was from a low base and so was bound to seem impressive.

‘The number of core central region units launched in November almost doubled from the previous month, but sales rose by less than 20 per cent,’ he added.

Jones Lang LaSalle’s head of research for South-east Asia Chua Yang Liang noted that the take-up rate of 54 per cent in the core central region suggested that developers may have been too optimistic in marketing their launches last month.

However, despite a poor showing of actual units sold on the city fringes, this sub-market managed a take-up rate of 146 per cent, he added. More units were sold than launched during the month as buyers bought unsold units that were launched earlier.

Strong buying sentiment in prime condo projects, according to Jones Lang LaSalle, is chiefly being driven by affordable prices – unlike in the previous peak in 2007.

The firm’s in-house data shows that the average capital value for prime properties within the core central region has grown the most so far this quarter, but is still some 16 per cent shy of the previous peak recorded in 2007.

Average resale prices in non-prime markets grew at a lower rate of 5 per cent, but they are already almost back to the 2007 peak, the firm said.

According to a DMG Research report released yesterday evening, the key thing to note about the market is the sustained level of appetite for high-end properties.

Sales activity and prices have yet to approach the previous peak, but buying appetite and price movement are expected to gain upward momentum over the next six months on the back of the integrated resorts’ opening, solid global macroeconomic news flow and increased foreign buying, it said.

For now, the market is likely to remain cautious until buying interest picks up from February next year, said Dr Chua.