SINGAPORE - Bolstered by keen interest in city-fringe homes, new private home sales climbed 5.4 per cent in May to 1,455 units, reversing the previous month's 50 per cent drop.
Posting the largest increase in take-up for the month was the Rest of Central Region (RCR), which contributed 41.4 per cent of sales. This is the highest monthly contribution by RCR since August 2010, according to Knight Frank's head of consultancy and research, Alice Tan.
Indeed, the proportion of transactions within RCR has been on the rise, from 14.3 per cent in Q3 2012, to 22.7 per cent in Q4. In Q1 2013, 24.9 per cent of homes sold were within RCR.
Excluding executive condominiums (ECs), RCR projects formed the bulk of the top five sellers by volume for the month of May.
Apart from top seller Stratum located in Pasir Ris (269 units sold at $925 per square foot), RCR projects such as Corals at Keppel Bay (132 units at $2,150 psf), KAP Residences (105 units at $1,893 psf) and Bartley Ridge (100 units at $1,257 psf) featured heavily in the top five.
Another factor supporting interest in RCR is the high selling price of some mass-market homes (located in the Outside Central Region or OCR), as well as the narrowing price gap between RCR and OCR homes, said OrangeTee's head of research and consultancy, Christine Li.
On the other end of the spectrum, the high-end market was fairly muted, despite developers continuing their launch momentum.
Of the 144 units launched, developers managed to sell only 125 units - the lowest monthly sales recorded for the region in 2013 and since just 57 units sold in March 2012.
While volume remained thin, transactions in TwentyOne Anguilla, Eden Residences and Hamilton Scotts may indicate that there is still interest in the luxury market, said Joseph Tan, executive director, residential, at CBRE.
The 75-unit Hallmark Residences moved four units out of the 20 launched; the 64-unit Liv on Sophia sold 23 units out of the 32 units launched; and the 54-unit The Siena had seven units sold out of the 29 units launched.
In a separate report issued by Savills Singapore, Alan Cheong, head of research, noted that the price gap between mid-tier and luxury properties has been narrowing since the introduction of the additional buyer's stamp duty (ABSD) in 2011.
"Using new non-landed projects in Districts 1 and 2 as an example to illustrate the pricing abnormality, the average prices for Q1 2013 was $2,213 psf. For three similarly new projects in the Alexandra Road area (Echelon, The Metropolitan and Ascentia Sky), the average price was $1,789 psf," said Mr Cheong.
"If we use the average prices regardless of size, the average price between Districts 9, 10 and 11 in Q4 2011 was $2,520 psf. This fell 33 per cent to $1,689 psf in Q1 2013 - a significant reversal. For the Alexandra district and Districts 1 and 2, prices actually went up over this period," he said.
Data from Colliers Research too reflected the closing gap. The median price of $2,150 psf achieved by Corals at Keppel Bay is also near the median prices achieved at previously launched and some newly launched projects in CCR (Hallmark Residences was sold at a median price of $2,130 psf).
According to Colliers, the majority of new units (539 transactions) fell within the $1,000-1,500 psf range, followed by 362 transactions which fell within the $1,500-2,000 psf range.
Separately, sale of mass-market homes remained stable, at 728 units, as launch volume in OCR slipped 8.1 per cent to 702 units.
Only a handful of projects were newly launched in OCR, with the largest being the 380-unit Stratum; other projects include the 136-unit NeWest (68 units sold) and 53-unit Cambio Suites (15 units sold).
Consultants agree that the residential property market has normalised.
"It's been five months since the latest cooling measures were announced and the residential property market has normalised and returned to stability as reflected by the May data," said Ong Teck Hui, national director, research and consultancy, at Jones Lang LaSalle.
"OCR still dominates sales take-up accounting for 50 per cent of total take-up. Demand from buyers in the mass market is still resilient as we see keen response to Stratum, an entry- level private housing project."
"Although the number of private homes (excluding ECs) launched in May 2013 increased by 31 per cent month-on-month, the number of housing units sold by developers rose only by 5.4 per cent in the same period. This indicates that the government cooling measures are having a growing effect on this private housing market," said Nicholas Mak, SLP International's head of research.
A total of 457 ECs were sold in May, the highest figure for 2013.
Twin Fountains, located in Woodlands, was the top seller for the month, selling 316 out of the 418 units available.
"There is a strong demand for ECs as they are not affected by the ABSD and the loan-to-value (LTV) measures," said Eugene Lim, key executive officer at ERA Realty Network.