New norm brewing in private home sales

New norm brewing in private home sales

SINGAPORE - Elevated sales figures for private homes may become the new norm given the sector's sustained record performance over the past few months, say industry watchers.

"When strong sales figures were released in February and March, many wondered whether those figures could be a short blip but now, with another month of robust sales in April, a new trend of elevated monthly sales may be appearing," said Credo Real Estate executive director Ong Teck Hui.

It was already no surprise when the Urban Redevelopment Authority (URA) announced a pick-up in April's private home sales volume following a temporary respite in March.

URA reported a total of 2,487 private homes - excluding executive condominiums (ECs) - being sold in the month of April, a 4 per cent jump from March, and slightly higher than the 2,417 units achieved back in record-making February. Sales volume for the month was also a generous 38 per cent higher than the same period a year ago.

Savills Singapore research head Alan Cheong pointed out that, excluding ECs, demand outstripped supply during the month, as the number of new homes launched in April only amounted to 2,386 units.

"May could well prove to be another bumper month. Whether new home sales (excluding ECs) can exceed April's will depend a large part on whether some larger projects can make it to the launch pad by the end of the month," noted Mr Cheong.

Things continued to be quiet in the EC launch scene with no new projects released for two consecutive months. In the absence of fresh stock, the segment's sales suffered, falling to 173 units, as compared to 639 units in March, bringing the total tally of new private homes (including ECs) to 2,660 for the month, 12 per cent lower month-on-month.

April also seemed to be a popular month among developers to launch their new projects, with names such as Barker 9, Eon Shenton, Hillsta, Katong Regency, Seahill, Sky Habitat, The Promenade @ Pelikat and Twentyone Angullia Park hitting the market.

Uptake for many of these new developments was also healthy with Katong Regency (244 units sold at a median price of $1,709 psf) topping the table for the most number of units sold in the month, among both new and older launches.

Notably, the UOL development which was sold out within a week was said to have been popular with buyers due to rising popularity of homes with a commercial component due to the added convenience it brings, said Lee Sze Teck, senior manager of DWG's research and consultancy arm.

Other new projects that were favoured by buyers in April included Hillsta (154 units sold at a median price of $1,054 psf), Sky Habitat (131 units sold at a median price of $1,583 psf) and Eon Shenton (87 units sold at a median price of $2,485 psf), though older launches such as Ripple Bay (174 units sold at a median price of $876 psf) and Palm Isles (153 units sold at a median price of $871 psf) also enjoyed healthy interest as well.

On the EC front, developments such as Twin Waterfalls and The Tampines Trilliant continued to sell well with both projects transacting 60 and 39 units respectively in April.

For those with much deeper pockets, the most exorbitant unit sold for the month was an apartment at Hilltops (located at Cairnhill Circle) which transacted at $4,398 psf.

However, the bulk of properties sold in April continued to hover in the $1,000 to $1,500 psf range.

Regionally, the core central region (CCR) reflected the sharpest pick-up in demand, with 106 units being sold in the area, up almost two-fold from March.

Sharing his views, Jones Lang LaSalle's head of SE Asia research Chua Yang Liang said: "Based on caveats lodged, the median prices of new sales in the OCR have been rising more than in the CCR resulting in the gap between OCR and CCR closing from 2.5 in June 2007 to 1.8 times in April 2012.

This has motivated more Singaporean buyers to enter the CCR market as evidenced by the recent developer sales result and this trend of a bottom-up support of the high end segment can be expected to continue."

Homes in the rest of central region (RCR) also seemed to have gained favour with buyers, with the number of units sold rising 70 per cent month-on- month to 867 units.

But mass market homes in the outside central region (OCR) bucked the positive trend, with sales declining 17 per cent to 1,514 after reaching 1,825 in March - though demand was still deemed to be healthy.

In the months to come, consultants expect buying momentum to continue with developers of mid and high-tier projects potentially testing the market with new projects in the CCR and RCR, borrowing confidence from the improving sentiment.

Said Chia Siew Chuin, director of research & advisory at Colliers International: "Barring any deterioration in the external environment and further policy risks, strong demand driven by abundant oncoming supply of private residential homes is likely to drive overall take-up for new private homes in 2012 to beyond 16,800 units, toppling 2010's record high of 16,292 units."

In the pipeline ahead, projects such as Riversails (920 units) and The Sorrento (131 units) are expected to be launched soon along with ECs such as Watercolors EC which comprises 416 home units.

This article was first published in The Business Times.

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