‘Old money’ props rise in luxury home sales

‘Old money’ props rise in luxury home sales

Prices hold firm surprisingly; investment climate may have stabilised, analysts say

Strong take-up: At UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold in May at a median price of $2,929 per square foot, URA data show




(SINGAPORE) Developer sales of new homes jumped to 441 units in May from 284 units in April, with some property consultants already calling it a ‘sharp rebound’.


While May sales were still relatively low compared to 2007 levels, several launches in prime and city-fringe locations did well.


According to Urban Redevelopment Authority (URA) data, at UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold at a median price of $2,929 per square foot (psf). Sources also told BT that most of these units were sold to Singapore’s ‘old money’.


Savills Singapore director (marketing and business development) Ku Swee Yong said: ‘Based on what we have seen in the past few months, high net worth individuals (HNWIs) have not been affected by the slowdown in the global economy.’


While these buyers may be more ‘picky’ now, ‘they don’t want to wait for prices to fall just to save 5 per cent’, he said. And with banks generally offering low interest rate returns, these HNWIs are looking to ‘park’ their money in real estate instead.


A check with UOL revealed that since last week, Nassim Park Residences has been marketed overseas and more than 50 units have now been sold. UOL Group’s general manager of marketing, Dolly Lian said that as things stand, more than 30 per cent of the buyers are foreigners and the average selling price is $3,300 psf. This is higher than $3,000-$3,200 psf average selling price that some market watchers expected.


It is understood that most of the foreign buyers are from Indonesia.


Another popular development in May was Macly Group’s 102-unit Vutton, with 72 units sold at a median price of $1,225 psf. A market watcher said this is in the same price range as UOL’s Pavilion 11, also off Moulmein Road, which was sold in 2007.


Also selling well in May was Ascend Land’s 106-unit The Verve, off Balestier Road. During the month, 42 units were transacted at a median price of $985 psf. According to URA data, 84 units have been sold so far. In April, eight units were sold at a median price of $1,055, while in March the median price was $1,187 psf.


Collier’s International’s director for research and advisory Tay Huey Ying said that while the rebound in sales activity could be ‘just a monthly fluctuation, it may also be a sign that most genuine buyers have come to accept that the current price levels have reached a fair level’.


Ms Tay noted that the number of new launches increased 74 per cent in May from April. ‘This encouraging response could be just what is needed to trigger more of such launches in the coming months,’ she said.


She added, however, that developers will remain cautious with regard to pricing, ‘as buyers in today’s market tend to be price-sensitive’.


CB Richard Ellis executive director (residential) Joseph Tan said: ‘Based on the transactions in May, contrary to market expectations, there was no downward adjustment of prices.’


Luxury prices in particular ‘seemed to hold firm’ as projects like Boulevard Vue, Scotts Square and Nassim Park Residences maintained $3,000-psf levels, he said. And in the eastern and western parts of Singapore, prices held at $800-$900 psf at projects including Breeze by the East, Blu Coral, The Ambrosia, The Lakeshore and Crystal Heights.


Still, not everyone was as sanguine about the state of the property market.


Knight Frank director (research and consultancy) Nicholas Mak said that while total new sales in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) rose 60.9 per cent month on month, the OCR saw a 14.6 per cent drop in sales volume month on month.


According to Mr Mak: ‘Essentially, the slight rise in sales volume can be attributed to some stability in investment sentiment. However, it should be noted that this escalation is still 32 per cent below the 12-month average figure.’


Looking at take-up rates (new sales versus new launches) in the three regions, Jones Lang LaSalle local director and head of research (South-east Asia) Chua Yang Liang said these were 87 per cent for CCR, 84 per cent for RCR and 146 per cent for OCR.


He said the strong take-up rates in CCR and RCR were a result of ‘latent demand spurred on by softening prices’, while the take-up rate in OCR was ‘the result of low supply of new launches over what appears to be a minimum demand threshold – an average of 113 units over the past six months – in the region’.


Source: Business Times

Private property sales jumped 52.6% last month

Private property sales jumped 52.6% last month


Judging by home sales for May, the worst may be over for the private residential market.


But analysts aren’t counting the chickens just yet.


The private residential market may have seen the worst for the year.


The number of private residential units sold in the month of May was up by 52 per cent over April to 441 units including executive condominiums.


According to the Urban Redevelopment Authority, there were an additional 152 units sold for May as compared to the month before.


Joseph Tan of CB Richard Ellis said this was partly a function of supply as developers launched more new units for sale compared to April, to provide potential buyers with more choices


Savills Singapore’s Director of Marketing and Business Development Ku Swee Yong.


“I think there are certain circles that are thinking that the bad news has been mainly priced in. I think we’ve defintely seen the worst for number of transactions in April. So 441 transactions in May looks pretty healthy. Over the next 2 months, it depends on whether developers are willing to launch. There may be a few launches coming up just before the hungry ghost festival.”


The average median price per square foot for a unit sold last month also rose slightly, to around 1,222 dollars, from April.


And the priciest unit sold for the month of May was from Scotts Square at 4,612 dollars per square foot.


Mr Tan of CB Richard Ellis said contrary to market expectations, prices of luxury homes seemed to hold firm.


Some projects such as Boulevard Vue and Scotts Square continue to see sales at around 3,000 dollars per square foot.


He said the sales momentum in May has continued in June so that the number of new homes sold is likely to be better.


This is also because more projects are expected to be launched such as Dakota Residences and The Amery.


In all, the property consultancy expects the total sales volume of new homes in the second quarter to be about 80 percent more than the 762 units in the first quarter.


But Nicholas Mak, of Knight Frank, says that the road ahead is still uncertain.


“I think we’re still going to continue to see some turbulance in terms of prices as well as in home sale volume. It’ll probably fluctuate within a certain narrow range, for example, we expect home sales by developers to fluctuate between 300 to 600 units sold every month for the remainder of 2008.”


Source: 938Live