‘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

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New private home sales up 55%

New private home sales up 55% 

 

Highest monthly figure so far this year follows softening of prices, surge in total units launched

By Joyce Teo, Property Correspondent 

 

SINGAPORE‘S private residential property market has started showing some signs of life after several months in the doldrums, thanks in part to an easing of prices.

Last month, developers sold 441 new homes, excluding executive condominiums, a sharp 55 per cent jump on the figure for April – albeit a low base – of 284 home sales.

 

That made May the best month so far this year, according to the monthly sales figures released by the Urban Redevelopment Authority yesterday.

 

The improved sales came on the back of 474 new homes launched by developers – a 75 per cent surge over April – though many of the units sold were from earlier launches.

 

Still, consultants caution against reading too much into the latest figures. They say the market is generally still taking a breather, as many buyers prefer to stay on the sidelines.

 

Sales have improved from a very low base but they remained 32 per cent below the 12-month average, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

 

The figures ‘do not necessarily imply that the private residential market has overcome the protracted lull sparked off by global economic woes’, he said.

 

‘The market is still at a plateau. Going forward, we will still see range- bound prices and volume of between 300 and 600 units a month. Sentiment is still very cautious,’ he said.

 

Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang, said median prices have eased.

 

The chief executive of PropNex, Mr Mohamed Ismail, said that most May sales were done at a median price of below $1,000 per sq ft (psf), a stark contrast to the end of last year when the median price of almost two-thirds of all sales was over $1,000 psf.

 

‘Upon closer scrutiny, we can see that less than 50 per cent of the units launched were actually sold.’

 

Also, slightly over half the sales were from earlier launches, he said.

 

Still, there are a few bright spots. While some are struggling to sell, developer Macly Group sold 72 out of 102 units of Vutton in the Novena area at $1,057 psf to $1,416 psf.

 

In the luxury market, the 100-unit Nassim Park Residences is the star performer, logging in sales of over 50 units since its soft launch at end-May.

 

As these are large apartments, prices range from about $10 million to a whopping $19.5 million, sources said.

 

The prime Nassim Road project – being developed by UOL Group, Kheng Leong and Orix Corp – has already hit a high of $3,800 psf – far better than its low of $2,318 psf.

 

One buyer is Mr Wee Ee Cheong, son of UOL chairman Wee Cho Yaw, who bought a penthouse for $18.33 million.

 

Just over 30 per cent of the buyers are foreigners. The project has already been launched in Jakarta and Hong Kong, said UOL.

 

Another luxury development Scotts Square in the Orchard area registered sales of four units at a median price of $3,818 psf last month.

 

The relatively strong sales in central Singapore were the result of ‘latent demand spurred on by softening prices’, said Dr Chua.

 

‘Going forward, we reckon that developers are likely to keep prices competitive to keep the market demand stable,’ he said. As long as prices remain affordable, price-sensitive buyers will return, he added.

 

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said the level of transactions and price levels seen last month are sustainable.

 

Source: Straits Times