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Sales of up to 16,000 private homes by year-end forecast

Friday 16 September 2011

Developers sell 1,348 units in Aug, against predictions of less than 1,000

(SINGAPORE) Some property consultants are now predicting that developers could end the year with sales of 15,000-16,000 private homes, excluding executive condominiums (ECs). The upper end of this band is close to the 16,292 units developers sold last year.

Better-than-expected August sales numbers released yesterday fanned such forecasts. Some also expect developers to continue their launch-as-fast-as-you-can strategy for mass-market projects on sites bought at state land tenders while others are counting on overseas monies seeking safe-haven destinations such as Singapore.

Urban Redevelopment Authority figures show developers sold 1,348 private homes in August, down 3.6 per cent from 1,398 units in July. Some analysts had earlier predicted August sales could slip below 1,000 units amid slower buying during the Hungry Ghosts Month and the stockmarket slide that began in early August.

'Confidence in the property market is certainly higher than in the past,' said Credo Real Estate executive director Ong Teck Hui.

Agreeing, DTZ's Southeast Asia chief operating officer Ong Choon Fah said: 'In the past property cycle, many people's faith in property has been strengthened. They've seen how one can lose everything investing in Lehman Minibonds, whereas with property, if you can hold long enough you can see your (investment) back.

'The important thing is to enter the property market with your eyes open, assess how much risk you can take and plan accordingly. Live within your means.'

Developers sold 290 ECs - a public-private housing hybrid - in August, a nearly 49 per cent drop from 568 units in July, when there were two new EC project launches (Blossom Residences and Riverparc Residence). As a result, developers' total sales (including ECs) eased 16.7 per cent month on month to 1,638 units in August.

In the first eight months of this year, developers sold 10,785 private homes and 2,035 ECs. The corresponding figures for the whole of 2010 were 16,292 units and 1,052 units.

The top-selling projects in the primary market last month were euHabitat at Jalan Eunos (439 units sold at a $1,015 per square foot median price, Boathouse Residences at Upper Serangoon View (202 units at $898 psf median price) and The Luxurie in Sengkang (151 units at $1,053 psf median price).

These three projects contributed to 71.1 per cent of total sales volumes in Outside Central Region (OCR). The region, which is home to mass-market projects, made up 82.6 per cent of new private homes (excluding ECs) sold last month, up from a 54 per cent share in July.

'Despite the surge in activity in OCR, the transacted price band of new non-landed units sold in the region moderated from $705-1,742 psf in July to $600-1,679 psf in August. This could be due to developers' more competitive pricing strategy amid increased prudence and price sensitivity among potential buyers,' said Colliers' director Chia Siew Chuin.

She added that the proportion of home sales transacted below $1,500 psf had risen from 73 per cent of all new sales (excluding ECs) in July to 89 per cent in August.

The priciest developer sale (in $ psf terms last month) was a unit at The Marq on Paterson Hill, which fetched a record $6,394 psf, followed by an apartment at The Orchard Residences which was sold at $4,277 psf.

CB Richard Ellis executive director Li Hiaw Ho said: 'Going forward, the take-up of new homes (excluding ECs) will depend on what new launches are offered and their price points.'

BT has learnt that expected upcoming launches of freehold projects include BBR's 140-unit Bliss@Kovan, Far East Organization's 222-unit The Seawind at Telok Kurau, and MCL Land's 121-unit Este Villa cluster housing development in Seletar. Developers are also expected to roll out by year-end several projects on 99-year-leasehold sites bought at state land tenders - including Sim Lian's Parc Vera condo at Hougang Avenue 7, a UOL-Singapore Land project at Bedok Reservoir Park comprising 530 apartments and 28 strata semi-detached homes, and possibly CapitaLand's 583-unit condo at Bedok Central.

Nomura Singapore analyst Sai Min Chow predicts price declines of about 10 per cent for high-end homes and 15 per cent for mass-market homes from now until end-2013 due to a build-up in developers' inventory arising from Government Land Sales, and weaker take-up.

Source: The Business Times