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Home sales dive in upmarket core, pick up elsewhere

Bourse turmoil, sub-prime problems cited for foreign investors’ caution


(SINGAPORE) The private housing momentum is shifting decisively as sales and launches flag in the Core Central Region (where upmarket homes are located) but appear to be picking up in other areas.

In the so-called Outside Central Region – which includes suburban mass-market housing locales like Jurong, Woodlands and Bukit Batok – developers sold some 259 homes in October. The sales here were more than in both other regions in the Urban Redevelopment Authority’s geographical classification, according to Jones Lang LaSalle’s analysis and represented a 72 per cent jump over September.

The Rest of Central Region, which includes locations like Amber Road, Rochor, Geylang, Toa Payoh and Bishan, also saw a 123 per cent month-on-month rise in developer sales to 196 homes in October, according to Jones Lang LaSalle’s analysis.

In contrast, demand in the Core Central Region was shrinking sharply. Just 135 homes were sold there in October, compared to 290 units in September and 583 in August, when the market was rollicking.

JLL also noted that the number of new homes launched by private developers dropped 55 per cent month-on-month in October for the Core Central Region, but jumped 299 per cent and 30 per cent respectively in the Rest of Central Region and Outside Central Region.

Knight Frank, which made a similar analysis, attributed the lower sales volumes in Core Central Region to the stock market turbulence causing local buyers to be more cautious while the US subprime problems and credit crunch have also dented sentiment among foreign investors.

Islandwide, developers launched 629 homes in October, up 10.4 per cent from 570 units in September. The number of homes they sold also increased 11.5 per cent from 529 in September to 590 in October.

JLL pointed out that the average gap between the highest and lowest prices achieved for projects in the Outside Central Region widened to 25.7 per cent in October, from 14.8 per cent in August and 18.7 per cent in September, which JLL suggests reflects more buoyancy in this segment. ‘Buyers are more optimistic and confident of this submarket,’ Dr Chua said.

‘However, this method does not account for the product differentiation or any other physical attributes that may have resulted in this gap. It is to be used only as an indication of buyers’ mood or confidence rather than to predict the market,’ he added.

Knight Frank’s analysis of URA’s data showed that, islandwide, the median transacted price increased 3.3 per cent from $960 psf in September to $992 psf in October. ‘The increase signifies that the market is on a path of modest and steady growth,’ the firm said.

It also noted that the impact of the withdrawal of the deferred payment scheme, which took effect on Oct 26 was yet to be reflected. ‘However, in subsequent months, buyers could adopt a more cautionary stance and although a significant drop is not expected, the number of units launched and sold will likely remain close to current levels,’ Knight Frank added.

CB Richard Ellis’ analysis shows that Park Natura in Bukit Batok chalked up the most primary market sales during October, at 101 units, followed by Aalto at Jalan Kechil (in the Amber Road/Peach Garden vicinity), with 49 units.

Two luxury projects that sold fairly well last month were Hilltops in the Cairnhill area, and Scotts Square, with 24 units and 33 units sold respectively.

Hilltops’ median transacted price was $3,711 psf, while that for Scotts Square was $4,005 psf. The developers of The Orchard Residences saw nine units being sold at a median price of $4,476 psf, with the highest price achieved of $5,600 psf setting a new record, as reported by BT earlier.

‘In the mid-range, new projects in the east such as Aalto, De Centurion, Suites @ Amber and The Seafront On Meyer achieved median prices ranging from about $1,300 to $1,600 psf. For suburban projects, Park Natura’s median transacted price was $1,022 psf,’ CBRE said.URA’s data also revealed that the first unit at Far East Organization’s Boulevard Vue at Angullia Park was sold in October for $3,900 psf. In the eastern part of Singapore, the first 20 units in the 28-unit Suites @ Amber were sold at between $1,224 psf and $1,440 psf.

CBRE predicts that developers will sell about 1,800-2,000 private homes in Q4 this year, bringing their full-year sales to 15,000-16,000 units – which will still be much higher than the 11,147 new private homes they sold for the whole of 2006.

The official URA private home price index, which has already risen 22.9 per cent in the first nine months of this year from end-2006, is likely to increase another 3 to 6 per cent in the final quarter, to achieve a full-year gain of 27-30 per cent.


Source: Business Times 16 Nov 07

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