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Record prices for some properties despite sliding sales – Sentiment steady last month despite fears over impact of US credit crisis

PROPERTY sales slumped last month, as buyers stayed on the sidelines but there was a silver lining with prices at some projects hitting record levels.

The cause of the sales dip was clear – concerns in the United States over its subprime mortgage industry triggered meltdowns in share markets across the globe.

Many spooked buyers put purchases on hold but the fact that prices of the deals that were done stayed buoyant reflects the firm undertone for private residential properties.

Urban Redevelopment Authority (URA) data showed that the number of new homes sold last month fell nearly 70 per cent to just 529 units, from 1,731 in August. July sales amounted to 1,378.

Developers typically sell about 7,500 new homes a year, though the recent boom has lifted figures. The URA data is based on sale options given by developers to buyers.

With more sales in the lower price ranges, median transacted prices, or the mid-point in prices, fell 27.7 per cent, from $1,328 per sq ft (psf) in August to $960 psf last month.

And with the lunar seventh month barely over, there were only a few new launches. One of them was Hillcrest Villa, a cluster of 99-year leasehold terrace homes near Dunearn Road.

Yet MCL Land still sold 162 out of the 163 units with a median price at $865 psf – said to be fairly high for a landed project in the area.

‘The high sales volume in August has caused a bit of indigestion in the market,’ said Knight Frank director (research and consultancy) Nicholas Mak.

‘September’s figures can thus be viewed as a healthy breather before the market resumes its momentum.’

Mr Mak said monthly sales would gradually improve to 800 to 1,000 units.

Sub-sales of residential property accounted for 6.8 per cent of all transactions last month, compared with 9.4 per cent in August, according to Colliers International.

Prices in some projects managed to hit records.

In the high-end segment, Ho Bee sold 36 units of its latest Sentosa Cove project Turquoise. The 91-unit project’s median price hit $2,587 psf while the highest was $2,772 psf, a record for the Cove.

In Scotts Road, Wheelock Properties sold 27 units of Scotts Square, of which 12 were above $4,000 psf.

A high for the month of $4,359 psf was recorded, with the median price at $3,985. It was the only project to sell above $4,000 psf last month.

There were also a few record highs for suburban projects. Two units at the 318-unit Gardenvista in Dunearn Road were sold at $1,223 psf and a record high of $1,449.

Sales at The Lakeshore in Boon Lay Way ranged from $695 psf to a record $1,080.

‘These buyers could be buying for their own use because the properties have just obtained their temporary occupation permit,’ said Savills Singapore director of marketing and business development Ku Swee Yong.

New projects such as The Beacon Edge in Tembeling Road also did relatively well. Six of the 32 units sold at a median price of $1,306 psf, with a high of $1,327.

Achieving record highs in a slow month could mean there are serious buyers out there, said Mr Ku. ‘Right now, there is strong demand in the mid-tier and mass markets.’

These are homes costing $800 psf to $1,600 psf, he said.

Mr Ku said the market was doing better this month but sub-prime hangovers may keep activity slightly muted.


Source: The Straits Times 16 Oct 07

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