Biz Times: Private home market stirs to life again

Private home market stirs to life again

Developers’ Q2 sales double to 1,542 from Q1 but still a far cry from 2007

 

(SINGAPORE) Developers sold 1,542 private homes in the second quarter, double the 762 units in the preceding quarter. This takes the total sold in the first half of the year to 2,304, according to the Urban Redevelopment Authority yesterday.

 

The Q2 number was shored up by the sale of 801 private homes in June alone – a huge jump from the 453 units sold in May and, in fact, the best monthly showing since August last year, when the impact of the US sub-prime crisis struck home.

 

Even so, the first-half sales – these numbers do not include executive condos – amounted to just about a quarter of the volume in the same period last year.

 

CB Richard Ellis predicts that full-year sales volume will come in at 4,000-5,000 units, less than half the record 14,811 private homes that developers sold in 2007.

 

BT’s analysis of URA’s data showed that the stock of private homes that could be launched for sale immediately but have been held back continued to mount, hitting 13,005 at end-June, up 20.5 per cent from the preceding quarter and 68.5 per cent higher than the 7,720 units as at the end of last year.

 

These units are in projects with the necessary approvals for sale – that is, they have secured sales licence and Building Plan approvals – and include projects under construction as well as those that have received Temporary Occupation Permit.

 

In addition, there were 3,379 units launched but unsold at the end of June this year – some 40.3 per higher than the end-2007 number.

 

‘Developers probably got more projects launch-ready by end-June, encouraged by the recent response at showflats,’ a property consultant said.

 

Looking ahead, this pool of yet-to-be-launched units is expected to be dynamic. ‘For the next one to two quarters, we could see the stock coming down if take-up remains encouraging. In turn, the encouraging sales may also spur other developers to get projects launch-ready and that could again add to the pool of yet-to-be-launched units,’ she added.

 

URA’s latest monthly survey of developers’ homes sales data in June showed ‘no consistent pattern of a downward adjustment in prices of new launches’, CBRE executive director Li Hiaw Ho said.

 

‘The differential between the prices contracted in June and in May or April could be attributed to adjustments for floor height and orientation. However, in line with the flash estimates, we expect only a marginal upside in residential prices in Q2.’

 

Developers launched 1,069 private homes in June, a jump of 125 per cent from 476 units in May.

 

For the whole of Q2, developers launched a total of 1,820 private homes, taking the figure for first-half 2008 to around 3,200 units.

 

Knight Frank’s analysis showed that, in June, most units were launched for sale in the Rest of Central Region (RCR) – which commanded a 57 per cent share or 612 units.

 

The region also accounted for 57 per cent of total private homes sold by developers in June. Successful project launches such as Dakota Residences and Clover By The Park helped boost RCR’s share in June.

 

For Q2, RCR also made up the lion’s share or 44.2 per cent of units launched, according to Knight Frank.

 

The highest-priced transaction in June came to $3,653 per square foot, for a unit at Nassim Park Residences, compared with $4,612 psf for a Scotts Square apartment in May. The lowest priced deal last month was $541 psf for an apartment at Sunflower Regency on Lorong 20, Geylang. In May, the lowest price of $518 psf was set by a unit at Palm Galleria in Telok Kurau.

 

Colliers International director (research and consultancy) Tay Huey Ying said: ‘As developers are increasingly forgoing aggressive pricing strategy in favour of competitive pricing strategy, cumulatively, this will result in a softening in price level for the general market.’

 

She expects developers to ramp up launches before the Hungry Ghosts Month starts on Aug 1, and predicts that launch volume could cross 1,300 units for July. As new launches are expected to be priced attractively, developers’ sales could possibly hit 1,000 units.

 

Source: Business Times

Straits Times: Up 77%: New private home sales

Up 77%: New private home sales 

Best showing since last Sept following US sub-prime woes, but market still cautious

 

SALES of new private homes shot up 77 per cent to 801 units last month, from just 453 in May, on the back of more project launches.

That was the best showing since September last year when the property market slowed in the wake of the United States’ sub-prime woes and stock market jitters.

 

But these numbers do not necessarily signal the return of the good times. The mood in the property market remains cautious, particularly as more bad news emerges from the US, market watchers say.

 

Last month, the total number of units launched by developers – mostly in the mass to mid-end segment – registered a dramatic jump of 124 per cent to 1,069 units, according to monthly figures released by the Urban Redevelopment Authority (URA) yesterday.

 

Developers are stepping up launches despite the weak sentiment as they want to launch ahead of the Hungry Ghost month starting on Aug 1, said Colliers International director for research and advisory Tay Huey Ying. Some home-hunters believe it is unlucky to buy at this time.

 

Some developers hope to clear stocks of 99-year leasehold properties which will become less attractive as the leases run down, she said.

 

Last month’s healthy sales figures were propped up, to a large extent, by the volume done at two large 99-year leasehold projects.

 

The 616-unit Clover by the Park in Bishan, alone accounted for 197 units sold – out of 308 units launched for sale – at a median price of $765 per sq ft (psf). The 348-unit Dakota Residences in Dakota Crescent sold 144 of 210 launched units at $978 psf.

 

Most of the properties sold last month were under $1,000 psf, indicating demand from upgraders, said the director of Savills Residential, Mr Ku Swee Yong. Only projects which were priced realistically sold fairly well, he said.

 

June sales show there is latent demand but buyers are price-sensitive, said DTZ executive director and regional head for consulting and research Ong Choon Fah.

 

Knight Frank director of research and consultancy Nicholas Mak said the number of launches has risen faster than sales figures, which could result in a gradual rise in the number of unsold housing stock.

 

If this stock builds up, it will be one of the factors that could weigh on prices.

 

But for now, this month’s sales figures are expected to be even stronger owing to more new launches, consultants said.

 

However, there should be a drop in next month’s home sales due to the Hungry Ghost month coupled with continuing fallout from the US housing crisis, said Mr Mak.

 

Price weakness, if any, will register only in the third or fourth quarter, he said.

 

The turnout at new showflats remains strong but potential buyers are very cautious when it comes to committing to a purchase, market watchers say.

 

‘There’s no push factor to buy now,’ said Mrs Ong. ‘Sentiment has been affected over the weekend by the US news. But affordability is still there.’

 

As developers are increasingly forgoing aggressive pricing strategies in favour of competitive pricing, cumulatively, the general market will see softer prices, said Ms Tay.

 

Colliers International’s research shows that luxury apartment prices already fell 3.9 per cent from the first quarter to an average of $3,049 psf in the second quarter, she said.

 

Meanwhile, the URA yesterday put up for sale a condominium site that is just next to the Tanah Merah MRT station.

 

Consultants expect a new 99-year leasehold project on the site to fetch average prices of between $700 psf and $800 psf.

 

Source: Straits Times