By Joyce Teo

PRIVATE home sales rocketed to a record in July as buyers defied the economic downturn to propel the property market into unprecedented territory.

Prices are also on the same track with values rising amid the rush to seal deals.

Developers sold a whopping 2,767 units of new private homes last month. This easily beat the 1,825 units sold in June, itself a number that had never been reached in the 2007 boom.

The numbers 'almost defy belief', said PropNex chief executive Mohamed Ismail, who described the recovery as nothing short of amazing.

The buying splurge brought new home sales in the first seven months of the year to 10,017 units. This is only about 10 per cent below the full-year level in 2006 when the market was on its way up. It is also well up on the 4,264 homes sold in all of last year.

Developers are cashing in on the heightened interest. They launched 2,878 units in July, up from 1,637 in June, according to Urban Redevelopment Authority data yesterday.

Just over half the units sold last month - including the top three sellers - were in suburban areas, which attract largely locals.

Buyers snapped up 294 flats at The Gale in Flora Road at a median price of $696 per sq ft (psf). In Upper Thomson, Meadows @ Peirce launched 400 units in July and sold 286 at a median level of $919 psf.

Waterfront Key in Bedok Reservoir Road launched 310 units and sold 191 at a median price of $734 psf.

Projects such as Centro Residences and Ascentia Sky were sold at prices that have not been seen before in their areas.

There was also some interest in high-end homes - Sophia Residence in Sophia Road and Volari in Balmoral Road did well. The highest price done was at Nassim Park Residences, where four units sold for a median price of $3,273 psf.

'With signs of the economy improving, home buyers are taking advantage of the opportunity to make their purchases,' said CBRE Research executive director Li Hiaw Ho. 'Investors have also turned to focus on property after having lost faith in financial structured products.'

Other consultants pointed to a positive stock market performance in July, increased supply, pent-up demand, as well as the affordable total quantum for smaller sized units.

They now say there is a good chance of this year's sales surpassing the 2007 record of 14,811 units, though they do not see a repeat of July sales.

More are also sounding a note of caution over the price run-up.

While Mr Ismail believes this year's sales will reach a record level, he said developers should not get carried away by the surge in demand. Marking prices higher would be 'akin to throwing cold water on a fire', he said.

Barring any unexpected shocks to the market, prices are likely to hit a plateau soon as they have risen too much too fast, said property expert Nicholas Mak.

He said sales could reach up to 16,000 units this year, with as much as 40 per cent coming from suburban areas.

CBRE Research said a few 99-year projects such as Trevista in Toa Payoh, a project in West Coast Crescent and another in Yishun Avenue 1 are expected this year. Trevista is already said to have attracted a long list of potential buyers.

However, Jones Lang LaSalle's head of research, South-east Asia, Dr Chua Yang Liang, warned that in terms of overall islandwide demand, the take-up rate in July has slipped slightly compared with the previous months.

'This suggests that developers might have been too zealous with the overall supply when demand still remains fragile.

'Unless we begin to record positive growth in the larger global and domestic economies, the recent spike in demand and prices, if prolonged, may cause asset-driven inflation in the longer term, if wage increases do not keep in pace.'

This article was first published in The Straits Times.