AMID growing talk of economic green shoots, local developers of high-end private homes rolled out 339 units last month – nearly five times the number in March, according to statistics released on Friday by the Urban Redevelopment Authority.

And they were not disappointed, as demand kept up with supply that month.

Some 332 private homes in the prime Core Central Region were sold last month, marking the highest since Sept 2007 – the peak of property prices – said Mr Nicholas Mak, director of consultancy and research at Knight Frank.

“This rebound is an encouraging sign that the high-end market is not void of life despite the economic turmoil ravaging across the world,” Colliers International‚s research and advisory director Tay Huey Ying said.

For instance, Illuminaire on Devonshire sold all 72 units launched last month at a median $1,703 per square foot, while BelleRive at Keng Chin Road also sold all 21 units launched.

Analysts agreed that developers, buoyed by the recent good response to mass market condominiums, were testing waters of the high-end segment.

But buyers continued to gravitate towards small units with “affordable price tags which can be under $1.5 million for high-end projects”, noted Savills Research & Consultancy associate director Priya Sengupta.

“Given that developers have started to raise prices of new units on a selective basis to test home buyers‚ price tolerance level, buying activity could be expected to hover in the current range as home buyers are spurred to commit ahead of further price increases by developers,” said Ms Tay.
Yet, developers wanting to move their inventory could launch or relaunch their mid-tier and high-end projects within a lower price bracket in the next few quarters, opined Ms Sengupta.

In total, 1,207 private homes were sold last month and 1,083 units were launched. It was the third straight month where units sold stayed above 1,000.

As in previous months, mid-tier and mass-market projects dominated two-thirds of total sales.

Source : Today, 16 May 2009

Sales in core central region get big boost in April, soaring to 19-month high of 322 units

THE high-end property market – which has remained subdued since the beginning of the year even as activity increased in the mass-market segment – started to move in April.

According to data from the Urban Redevelopment Authority (URA), some 1,207 units were sold by developers last month. And unlike in the first three months of the year, homes in Singapore’s core central region (CCR) – which includes the prime District 9, Marina Bay and Sentosa – sold as well, with transaction volumes there soaring to a 19-month high of 322 units. In contrast, only 133 homes were sold in the CCR in March.

This rebound is an encouraging sign that the high-end market is not totally void of life as feared, analysts said. Outside the CCR, some 523 homes were also sold in the mass-market outside central region in April, as well as 362 homes in the more upmarket rest of central region.

Buoyed by the performance of the mass market over two consecutive months in February and March, developers started testing the ground with launches in the mid-tier and high-end segments in April.

While just 70 units were launched in the CCR in March, the number rose almost five times to 339 units in April – the highest number since September 2007. Launches in the CCR accounted for almost one-third of all units launched in the month.

‘Developers were probably hoping to ride on the rebound in buying momentum to clear their stock and land bank,’ said Tay Huey Ying, director for research and advisory at Colliers International.

Colliers’ analysis showed that there was a significant jump in the number of new units sold in April in the range of $1,500 per square foot (psf) and above. Some 90 units were sold at above $1,500 psf in April, compared to less than 12 units a month in the preceding six months. Of note, Illuminaire on Devonshire sold all of its 72 newly launched units at a median price of $1,703 psf.

Homes in the $1,000-$1,500 psf price range also sold well. Projects with significant numbers of units sold in this price range include the 51-unit BelleRive on Keng Chin Road (where all 21 units launched in April were sold for $980-$1,404 psf) and Attitude at Kim Yam in the River Valley area (where 22 out of the 33 units launched were sold for $1,157-$1,306 psf).

However, there was still no activity in the luxury segment. April marked the fourth consecutive month with no units transacted above $2,500 psf, pointed out Nicholas Mak, Knight Frank’s director of consultancy & research. ‘Although the sale volume is showing signs of increase, price growth is still subdued,’ Mr Mak said.

Analysts said there could be a variety of reasons why the buying momentum carried on from February and March. Some 1,332 homes were sold in February, and another 1,220 in March – a huge pick-up in sales volume after just 108 homes were sold in January.

Talk that the United States and Singapore economies are recovering, combined with the recent stockmarket rally, could have injected confidence and lifted the sentiments of potential buyers, analysts said.

There is also an increasing sense among potential homebuyers that home prices could be nearing bottom, with URA’s statistics showing that private home prices chalked up their worst-ever quarterly decline of 14.1 per cent in Q1.

Developer sales for the January-April period are already about 90 per cent of all developer sales in 2008. Such launch and sales activity can be sustainable in the months ahead if the Singapore economy and employment market were to expand in 2009, said Knight Frank’s Mr Mak.

The second quarter may chalk up home sales volume of 3,000 units, said Li Hiaw Ho, executive director of CBRE Research. In Q1, 2,660 homes were sold.

Priya Sengupta, associate director of Savills’ research & consultancy unit, warned, however, that in the coming months, cautiousness is the key in developer launches as any sign of ‘false euphoria’ may scare the buyer away, leading to several months of inactivity again.

Others similarly called for ‘cautious optimism’.

There is still enough pent-up demand from homebuyers for a few more months, said Chua Yang Liang, Jones Lang LaSalle’s head of research for South-east Asia. But he added: ‘However, until there is a clear signal of a stabilisation and underlying positive growth in the real economy, the residual pent-up demand alone cannot be expected to lift the residential market in the long term.’

Source: Business Times, 16 May 2009

Private home sales in Singapore dipped slightly in April, but remained above the 1,000-unit mark for the third straight month.

Latest figures from the Urban Redevelopment Authority (URA) showed that 1,207 units changed hands, about one per cent shy of the number of sales transactions in March (1,220 units).

Demand for new private residential properties picked up recently because of lower home prices and expectations that the economy is recovering.

The recent rally in the stock markets has also helped. Some market watchers say a few investors may have taken profit and parked their funds in more stable investment options like real estate.
But some say the sales momentum may not last.

Chua Yang Liang, Head of Research and Consultancy, Jones Lang LaSalle, said: “(I’m) looking at somewhere between 2,000 and 2,400 units that were pent up collectively over in the month of October, November, December and January.

“Unless there’s a fundamental growth in the real economy, this pent up demand, the residual effect may not sustain the property market in the long haul.”

Suburban areas continued to shine, with Mi Casa in Choa Chu Kang, Double Bay in Simei, Kovan Residences accounting for 298 units of total sales. The Arte at Thomson, which is located on the city’s fringe, was also popular, with 110 deals sealed.

In April, developers placed 1,083 new units for sale, up from the 832 launched the previous month.

Industry players say the momentum is starting to filter from the mass market segment to the mid-tier one, which comprises properties costing between S$900 and S$1,300 per square foot. They also expect to see more activity in the luxury home segment in the next few months.

High-end property launches jumped nearly four-fold on-month in April to 339, making up a third of all units offered. Sales in the prime areas soared to a 19-month high of 322 units.

Donald Han, Managing Director, Cushman and Wakefield Singapore, said: “We are going to see more launches potentially in the core central area, in district 9, 10 and part of 11, particularly for some of the collective enbloc sales which have been bought by developers.

“Some of them are pretty much ready to be launched – they’ve got their showflats ready. So there will be more launches in these prime areas, as part of strategies for developers to test waters for the mid- and upper-end residential market.”

Looking ahead, analysts say developers may not raise prices but rather reduce the discounts offered.

On the whole, prices of private homes are expected to fall by a single digit percentage point range for the next few quarters.

Market watchers project that some 6,000 units will be sold this year if the economic conditions stabilise.

Source : Channel News Asia, 15 May 2009

Vacancies hit 10% in Q1; broader property market sees prices fall across sectors; rentals also slide, URA data shows

This segment took a hit for the second consecutive quarter, government data showed. The broader property market also saw prices and rentals slipping.

‘Many of the corporates we talk to are well advanced in implementing their restructuring programmes. From this, we deduce we may be going through the period of sharpest contraction in office demand now. Contraction may ease in the second-half,’ he said.

The weak demand in the office sector also rubbed off on business park space, which saw negative take-up of about 215,000 sq ft in Q1, against positive take-up of some 10,700 sq ft in Q4 2008. Vacancy rate for the sector increased from 6.2 per cent in Q4 2008 to 9.7 per cent in Q1 2009.

In the private residential segment, URA’s overall islandwide price index slipped 14.1 per cent in Q1 over the preceding quarter, slightly steeper than the flash estimate decline of 13.8 per cent. The Q1 drop was also the biggest quarterly drop to date. The index has now eased 21.2 per cent since peaking in Q2 last year.

Colliers International director Tay Huey Ying says: ‘Mass market homes could see more gradual price corrections averaging about 8 to 12 per cent over the next three quarters (from Q1 2009 levels) as more sellers in the secondary market as well as developers with unsold units from earlier launches can be expected to adjust the pricing of their properties to near-current levels.’

She predicts bigger average price declines of 10-15 per cent for the mid-tier and high-end/luxury segments over the same period.

URA’s private residential rental indices show that the sharpest contraction in Q1 was for non-landed homes in the Core Central Region, which shrank 10.3 per cent quarter on quarter. The overall private residential rental index slipped 8.5 per cent in Q1, bigger than the 5.3 per cent drop in Q4. ‘The decline in rents could be attributed to supply outstripping demand as more expats left the country and to more new projects being completed,’ CBRE executive director Li Hiaw Ho said.

Developers sold a total 2,596 private homes in Q1, about six times the 419 units in Q4 2008.

The latest Q1 number was 64 units lower than the 2,660-unit figure collated from monthly developer sales stats (for January to March 2009). The decline reflects lapsing of options on units sold earlier in the quarter, URA’s spokeswoman said.

Market watchers also observed a slight easing in residential supply.

Some 27,423 private homes are expected to be completed between Q2 2009 and 2011, lower than the 31,004 units projected for completion between 2009 and 2011 in URA’s Q4 2008 data.
The smaller pipeline supply partly reflects the completion of 2,230 units in Q1 2009.

Developers may also have postponed redevelopment of some of the sites they had bought through en bloc sales and delayed construction, said URA’s spokeswoman.

URA’s shop rental index eased 3.3 per cent quarter on quarter in Q1, after dipping 0.6 per cent in Q4. The all industrial rental index slid 5.6 per cent in Q1, also worse than the 3.7 per cent fall in Q4.

Summing up prospects for Singapore’s property markets, Knight Frank managing director Tan Tiong Cheng said: ‘For the private residential sector, there’s evidence of a pick-up in activity – not just in the primary market but also subsales and resales. For office and industrial, there are going to be more rental declines because of the economic slowdown. Retail will be difficult. New malls opening this year may drum up business, but it will be at the expense of existing malls, given that tourism numbers are weak.’

Source: Business Times, 25 April 2009

PRICES of private homes fell off a cliff in the first quarter, continuing a dramatic slide that has now wiped out the gains owners have made since 2007.

Values dived 14.1 per cent in the first three months this year – the biggest fall on record – and followed a 6.1 per cent slide in the last quarter of last year.

Figures from the Urban Redevelopment Authority (URA) yesterday also point to pain in the residential rent market and in the office sector.

But the plight of the private home sector caught most attention. The first-quarter fall was worse than an initial URA estimate of 13.8 per cent, indicating the slide accelerated towards the end of the quarter.

The souring of the market has been fast and furious. Prices had been rising for four years and were still going north until as late as September of last year but then the rot set in.

Price declines have been registered in three consecutive quarters with the fall in the first three months of this year the worst since the URA began keeping data in 1975. Private homes on the city fringes suffered the most, with prices down 17 per cent, compared with 16.2 per cent in the city centre and 7.3 per cent for suburban residences.

The hefty gains over the past two years have been erased, so owners who bought after the first quarter of 2007 could see their home’s valuation fall below the purchase price, said Colliers International’s director for research and advisory, Ms Tay Huey Ying.

Rents for private homes also kept falling and at a faster rate. They plunged 8.5 per cent in the first quarter compared with a 5.3 per cent decline in the last three months of 2008. Rents of non-landed prime homes fell the most, at 10.3 per cent.

HDB resale flats showed more resilience with prices inching lower by just 0.8 per cent in the first quarter – the first fall since the third quarter of 2006.

But there was a sliver of good news. Sales of new homes in the first quarter were a robust 2,596 units, driven by pent-up demand, price cuts and innovative product packaging, experts said.

The mass market sector was most active with upgraders picking up many units to help lessen the rate of price fall in suburban areas, said Knight Frank consultancy and research director Nicholas Mak. Developer sales in suburban areas reached 1,637 units in the first quarter, almost as many as were sold last year, he said.

But the prime market accounted for only a meagre 9.5 per cent of all developer sales. And sales in the resale and sub-sale markets remained weak.

‘Property really depends on the economy, and the economy around the world and in Singapore still looks pretty weak.’ National Development Minister Mah Bow Tan told Bloomberg in Vietnam yesterday.

Mr Mak expects private home prices and rents to contract sharply in the first half of the year but the rate of decline will decelerate.

Singapore’s office market also took a beating in the first quarter. Rents slid 10.7 per cent, the biggest fall since the first quarter of 1992, while prices fell 12 per cent. Take-up contracted for the second consecutive quarter and for the first time since late 2006, the islandwide vacancy rate hit 10 per cent.

Source: Straits Times, 25 April 2009

Q1 sees rise in resale and subsale deals as prices get more attractive

(SINGAPORE) The pick-up in private home sales by developers has spilled over to the secondary market. Falling prices are greasing the flow.

Caveats have been lodged for 1,063 private homes in the resale market in the first three months of this year, up 11.7 per cent from the preceding quarter. In the subsale market, 384 caveats were lodged in Q1 2009, reflecting a 44.4 per cent increase from the Q4 2008 figure, according to Savills’s analysis of caveats captured by the Urban Redevelopment Authority’s Realis system.

Resales and subsales refer to secondary market transactions. Subsales involve projects that have yet to obtain Certificate of Statutory Completion while resales relate to projects that have received CSC. CSC is typically obtained anywhere from three to 12 months after the project receives Temporary Occupation Permit (TOP).@ Marina Bay, The Cosmopolitan and Rivergate have received TOP in 2008/2009, while One Amber and The Centris will get TOP soon, Savills said.

Market watchers said that this could be because many specuvestors who bought on deferred payment schemes (DPS) may be inclined to offload their units as the TOP date approaches, when they have to pay up the bulk of the purchase price to developers.

However, CB Richard Ellis executive director Joseph Tan pointed out that regardless of whether buyers opted for DPS, private housing projects are typically a hive of activity around the time they receive TOP, drawing buyers who want to move in themselves or to rent out immediately.

He also attributed the increase in subsale and resale transactions in Q1 to ‘prices being at fairly reasonable levels now’, with the stock market rally improving sentiment.

Mr Tan said that whether the buzz in the secondary market continues will depend on the stockmarket. ‘So long as the Straits Times Index remains fairly stable, it will give comfort to investors that the property market is close to bottoming out, given the price correction in the past 12-15 months,’ he added.

According to DTZ’s figures, which are based on resale prices, the average freehold luxury condo and apartment price of $1,880 psf in Q1 this year marks about a one-third drop from the peak of $2,800 psf in late 2007/early 2008.

The most expensive subsale deal (in terms of psf price) in Q1 this year was a 29th floor unit at Orchard Residences that changed hands for $2,579 psf. In absolute dollar quantum, the most expensive subsale deal was an 11th floor apartment at The Tate Residences at Claymore Road, which sold for $5.93 million ($1,850 psf).

As for resale transactions, the top grossers were a 10th floor apartment at Richmond Park at Bideford Road which sold for $2,199 psf and a 25th floor unit at Four Seasons Park at Cuscaden Walk that fetched $6.5 million ($1,701 psf)

The average prices of resale and subsale transactions at the most popular projects in Q1 2009 were generally lower than in the preceding quarter as well as the same period last year.

City Square Residences, the most popular subsale project in the first three months of this year with 41 units, saw an average price of $804 psf, down 5 per cent from the $845 average subsale price in Q4 2008 and 15 per cent below the $947 psf average subsale price seen in Q1 2008.

Average prices for 11 of the 12 most popular subsale projects in Q1 this year fell between one and 14 per cent from the preceding quarter. The exception was Clementiwoods Condo, where eight subsale deals were done at an average of $664 psf in Q1, some 5 per cent higher than in the previous quarter but down 7 per cent from the same period a year ago.

Compared with Q1 last year, average prices for all 12 top-selling subsale projects in Q1 2009 fell between 4 per cent (Centris) and 36 per cent (The Cosmopolitan).

As for resale transactions, the 11 hottest developments saw quarter-on-quarter price declines ranging from 4 per cent (for The Lakeshore) to 19 per cent (Bayshore Park) in Q1. The Lakeshore was the most popular resale project in the first quarter, with 27 units changing hands, followed by Costa del Sol, with 11 units.

Savills Singapore head of research Priya Sengupta noted that the 11 most popular resale projects in Q1 were all in the mass and mid-tier sectors. ‘Amid the economic uncertainties, affordability remains a key consideration for home buyers/investors; 100 of the 113 deals in the 11 most popular resale projects in Q1 were at below $1 million,’ she said.

Resale activity for high-end projects was limited. ‘This could be attributed to the price disparity between sellers and buyers as the latter expect further downward price adjustment in the near future, as well as the stricter home loan criteria in terms of loan-to-value ratio, especially for investors,’ Ms Sengupta said.

Mass and mid-tier projects also saw more subsale transactions than high-end projects. Much of the subsales activity in Q1 surrounded projects that have either received TOP recently or are close to receiving it. For instance, City Square Residences, The Esta, The Sail

Source: Business Times, 24 April 2009

Fall in prices in first quarter greater than that for properties in city centre, suburbs

Values for city-fringe homes are typically thought to hold up better than those in the suburbs, but the fall in prices in the first quarter means that this belief may no longer hold true, at least temporarily.
These homes are in areas which are not attractive to institutional investors and are also not within the reach of many HDB upgraders.

In view of these dynamics, the question is whether the areas still present good buys.

The city-fringe areas are what the Urban Redevelopment Authority (URA) terms RCR, or rest of central region. They are sandwiched between the core central region (CCR) – which comprises districts 9, 10, 11, Sentosa and the Central Business District – and the outside central region (OCR).

RCR areas include Paya Lebar, Geylang, Amber Road, Lavender, Toa Payoh, Tiong Bahru and Telok Blangah.

URA data shows that last year, prices of non-landed properties in the city centre, city fringe and suburban areas fell by 5.6 per cent, 4.7 per cent and 2.9 per cent, respectively.

But first-quarter flash estimates show that prices of city- fringe flats slipped by 17.2 per cent – more than the 15.2 per cent drop for city centre flats and the 7.5 per cent fall for suburban ones.
Price

The price index reflects the rate of growth for each region, said Ms Jacqueline Wong, head of residential at Jones Lang LaSalle.

That the RCR experienced the steepest first-quarter price drop based on the flash estimates may just imply that the region is undergoing a greater price correction as prices might have been inflated during the property market boom, she said.

In terms of pricing, RCR pales in comparison to CCR as the latter’s branding and location are better, she said.

It is thus fair to say that RCR is ‘a poorer cousin to CCR’, added Ms Wong.

In some parts of the RCR nearer to the city, developers tend to leverage on prime areas when they sell their projects, said Chesterton Suntec International’s Mr Colin Tan.

He said: ‘It’ll be a discount from prime areas rather than a premium over suburban areas.’
But a price correction is happening now in the RCR, as with other areas.

‘At the moment, it is probably perceived as overpriced. Investors may want to wait for it to come down to a more realistic level,’ said Mr Tan.

Prime beats RCR
In general, where investors are concerned, prime areas are the best, experts said.

‘If you can afford it, buy prime. Depending on the type of properties you buy, there is a better chance for capital appreciation when the market recovers,’ said Knight Frank’s Mr Nicholas Mak.

‘If you cannot, buy a property near an MRT station farther away or in the suburbs if your objective is to cash out.’

Mr Tan said a price recovery, when it comes, will be quicker in an established area like Orchard.
The RCR has quite a few new residential areas, so it may take time for the value in these areas to rise, he said.

City centre properties generally enjoy ‘unrivalled prestige, exclusivity and locational advantage’, and are hence extremely popular with expatriates, particularly those with higher budgets, said Ms Tay Huey Ying, director for research and advisory at Colliers International.

As prices of these properties have eased substantially from their stratospheric levels in 2007, they would certainly be worthwhile investments for those who can afford it, she said.

A mixed bag
Nevertheless, the RCR is not a write-off, experts stressed.

‘Properties in RCR will, however, continue to be attractive to those who remain priced out of the high-end market, or those with a lower risk appetite,’ said Ms Tay.

‘The RCR is definitely an area not to be forgotten,’ said Ms Wong.

February and March sales data has proven that RCR projects such as the sold-out Alexis at Alexandra Road and The Arte at Thomson Road are in strong demand, she said.

‘In terms of the leasing market, developments in RCR remain popular among tenants as they are more affordable compared to those in prime areas,’ said Ms Wong.

The good thing about RCR is that there is a higher probability that the properties are freehold, Mr Mak said.

Condos in the suburbs next to MRT stations tend to be 99-year leasehold properties.

But unlike the case in most suburban estates, not many RCR projects are near MRT stations.

‘The RCR is a mixed bag. For instance, there is Tanjong Rhu which is quite popular and not too far north, and there is Geylang, an area that some people will not touch with a 10-foot pole.’

Source: Straits Times, 19 April 2009

But healthiest quarterly sales in more than a year may not signal sustained recovery

(SINGAPORE) A ray of hope dispelled some gloom in the private home market yesterday when new data showed developers selling 1,220 new units in March. This brings the number sold in Q1 2009 to 2,660 – the best quarterly performance since Q3 2007.

But could this be a false dawn? Citing weak economic fundamentals, several industry watchers believe that it is still too early to say if a nascent recovery has begun.

According to Urban Redevelopment Authority (URA) figures from developer submissions, private home sales held up in March and dipped just 8 per cent below the 1,332 units sold in February.
Both months’ showings were markedly better than in January, when buyers took up just 108 units.
In fact, the number of units sold in Q1 2009 has already reached around 60 per cent of that for the whole of 2008.

‘Most of the demand in the first three months of the year was from Singaporeans and permanent residents, a significant proportion of whom comprised HDB upgraders,’ said CBRE Research executive director Li Hiaw Ho.

Indeed, new launches in mass-market to mid-tier projects contributed to the bulk of sales in March. The most popular was Double Bay Residences in Simei – developers UOL Group and Kheng Leong sold 264 units at a median price of $659 psf.

Far East Organization also sold 101 units at its Mi Casa condominium in Choa Chu Kang at a median price of $617 psf, while 90 units at City Developments’ The Arte fetched a median price of $874 psf.

There is ‘strong demand for lower-range properties in the outer areas that are priced below $1,000 psf,’ observed PropNex CEO Mohamed Ismail.

The mass-market and mid-tier sectors also dominated recent launches. DTZ senior director of research Chua Chor Hoon noted that 95 per cent of all launches in Q1 09 were outside the prime districts 9, 10 and 11. Developers brought out 832 new units in March, down 22 per cent from the 1,072 in February.

In contrast, activity in the Core Central Region continued to lag behind in March. Reception to The Mercury at Shanghai Road was the strongest, with buyers taking up 62 units at a median price of $1,148 psf.

The retreat of foreigners from the luxury property market could be one reason for the weak performance, said Knight Frank’s director of research and consultancy Nicholas Mak. ‘Preliminary figures suggest that the percentage of foreign transactions stood at 16.8 per cent in Q1 2009, settling at levels observed in Q2 2003 when the Sars outbreak badly affected the market.’

On the whole, most observers BT spoke to believe that the property market still faces downside risks – the coming months may see prices stay flat or fall and the number of units sold may decrease.

‘Historically, economic recovery precedes property market recovery,’ said DTZ’s Ms Chua. ‘Right now, there is no economic fundamental to support a bottoming of the property market.’

Just on Tuesday, the government cut its 2009 economic growth forecast again to a range of minus 6 to minus 9 per cent.

Already, there are signs of developers lowering prices to push sales. For instance, 6 units in Kovan Residences went for $782-$865 psf in February, achieving a median price of $809 psf. By March, 56 units were sold at a median price of $705 psf, with overall prices ranging from $597-$823 psf.

In fact, price cuts and the relatively affordable costs of smaller units could have spurred demand in the last few months, said DMG & Partners Securities analyst Brandon Lee. CIMB analyst Donald Chua also expects more price adjustments to happen at projects that have not been fully taken up.

In terms of new units that can be sold in the next nine months, few market watchers were confident of seeing the 1,000-a-month mark being crossed often. Some estimate that the transaction volume this year may range from 6,000-8,000 units in total. This would still be an improvement on 2008, when 4,264 units were sold.

Still, it’s not smooth sailing. Even some popular projects are taking back units. URA data indicates that buyers returned 20 units at the Caspian and 10 units at the Alexis between February and March.

URA will release more concrete data on home sales on April 24. Among other factors, its real estate statistics for Q1 2009 will take into account options on units sold that subsequently lapsed later.

Source: Business Times, 16 April 2009

THE bumper private property sales recorded in February were no fluke.

For a second straight month, home hunters defied the weakening economy to buy more than 1,000 units last month.

Property consultants say buyers are attracted to what they regard as good buys in the moderately priced mass market.

Still, they warn that these strong buying levels are probably not sustainable.

Last month, property developers sold 1,220 new private homes, just shy of the 1,332 units sold in February.

It was the first time in over a year that the market has seen two consecutive months with more than 1,000 units sold. Sales for both months were a stunning contrast to the dismal 108 in January.

Another striking figure: First-quarter new private home sales hit 2,660 units, representing 62 per cent of all new homes sold during the whole of last year.

February sales – boosted mainly by two new launches Alexis and Caspian – were the highest since August 2007.

Figures compiled by the Urban Redevelopment Authority also showed 832 new housing units were launched last month, compared with 1,072 units in February and just 204 units in January.
Most units sold last month were in the mass market, along with a few city-fringe small-format apartments at condominiums such as Domus and The Mercury.

HDB upgraders were the hottest group of buyers. CBRE Research said that last month alone, they bought 550 to 600 units at mass market projects such as Caspian, Double Bay Residences, Kovan Residences, Livia, Mi Casa and The Quartz at median prices of $610 per sq ft (psf) to $740 psf.

A survey of first-quarter caveats lodged for this market segment indicated an average price of $695,000, said CBRE Research executive director Li Hiaw Ho. ‘This is probably a good time for HDB home owners to upgrade to private property as the price gap between private properties and HDB resale flats has narrowed.’

Said Colliers International director for research and advisory Tay Huey Ying: ‘Developers have lowered their price expectations for new launches and generally cut prices of unsold units. Buyers are biting as there is pent-up demand.’

The top three sellers in March were Double Bay Residences, Mi Casa and The Arte. About 85 per cent of units sold last month were priced below $1,000 psf, said PropNex chief executive Mohd Ismail.

The high-end showed some life with 70 units launched and some sales, including one Orchard Scotts unit at $2,220 psf.

But overall, only 100 prime units were launched in the first quarter, or just 4.7 per cent of all units launched, well down from the 39.4 per cent of all units launched in the fourth quarter last year.

Knight Frank director of research and consultancy Nicholas Mak said this was partly due to the retreat of foreigners from the luxury market.

Preliminary data suggests foreign deals stood at 16.8 per cent in the first quarter – a level last seen when Sars badly hit the market in 2003, he said.

Market analysts say it is a good start to the year, but they do not expect the strong buying to continue long-term.

‘In the short term, this rate of buying can continue provided developers lower or maintain their prices,’ Chesterton Suntec International’s research and consultancy head Colin Tan said of March sales.

But in the long term, it is not sustainable, he said. ‘The last time the market sold so many new units (14,811 units) was in 2007. That was when the deferred payment scheme was available. And it has since caused indigestion in the top end of the market.’

Unless the Singapore economy and employment market improve significantly this year, only 6,000 to 7,000 new private homes are expected to be sold, said Mr Mak.

He said healthy demand for mass market homes is likely to continue only as long as average HDB resale prices do not fall by more than 7 per cent year on year.

‘Many in the mass market segment are buying now and banking on their future earnings to service their loans as they are afraid of missing the boat,’ said Mr Mak.

Source: Straits Times, 16 April 2009