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Private home sales inch up; prices remain firm

URA data shows 4,000 units in 70 developments with pre-requisites for sale as at end-Nov

(SINGAPORE) The number of private homes sold by developers inched up 4.7 per cent to 593 units in November, up from 566 units in October.

The Urban Redevelopment Authority (URA) also revealed monthly property market data of transacted benchmark prices as well as median prices. During the month, a significant number of transactions were seen at Amber Residences, which sold 85 units at the median price of $1,392 psf, and Casa Fortuna which sold 103 units at $1,009 psf.

CBRE Research executive director Li Hiaw Ho also noted that 20 units at 8 Napier were sold at a median price of $3,557 psf and pointed out that these were likely to have been made by a single buyer.

On the performance in November, Mr Li said: ‘Overall, prices are firming. Sales volume and prices in December should remain at the same levels as October and November.’

Indeed, developers told BT that launch prices are being maintained even though buyers are now a bit more ‘cautious’.

UIC Ltd’s 192-unit Park Natura, across from Bukit Batok Nature Park, saw 56 units sold in the month at a median price of $945 psf. The price was slightly lower than the October median price of $1,022 but UIC group general manager Vito Koh explained that this was because units sold in November included those with private enclosed spaces like roof terraces.

Mr Koh said that the withdrawal of the Deferred Payment Scheme (DPS) have made buyers more cautious but added that he believes developers are not lowering prices to move units. ‘Prices are not coming down, but they are not going up either,’ he said.

A comparison of the median price of Amber Residence ($1,392 psf) and the reported average selling price ($1,650 psf) does appear to show that prices may have softened a little.

According to the URA data, 68 units were sold in the $1,000-$1,500 psf bracket with 16 units sold in the $1,500-$2,000 psf bracket. One unit was sold at between $2,000-$2,500 psf.

Jones Lang LaSalle head of research and consultancy Chua Yang Liang noted that launches declined significantly in the Core Central Region (CCR) by 43 per cent from the 166 in October to only 95 in November. ‘The take-up or demand further reflects this softer market with 130 units absorbed – a marginal drop of 4 per cent month-on-month (MoM),’ he said.

Similarly, demand in the Outside Central Region (OCR) also weakened with a 33 per cent MoM decline or only 173 units absorbed compared to 259 in October. Dr Chua pointed out that this was on the back of a larger supply of 221 units or a 28 per cent increase in the number of units launched.

‘The decline in demand in OCR is a likely result of the removal of the DPS,’ he explained.

In contrast, the demand in Rest of Central Region (RCR) remained strong. In November, the take-up increased by 57 per cent MoM.

Most of the transactions in the RCR were in District 15. ‘Take-up in this segment is largely driven by foreign occupiers that has spilled over from the CCR,’ Dr Chua added.

According to the URA data, there are over 4,000 units in 70 developments with pre-requisites for sale as at end-November. This includes mass-market offerings at Bedok Resevoir as well as high-end developments at Cairnhill.

While developers are not ‘panicking’ at the possibility of a slowdown in the economy, Cushman & Wakefield managing director Donald Han believes more will be ‘repositioning’ their launches and going directly to foreign buyers in the Middle East and North Asia.

Mr Han, who expects the total volume of transactions in Q4 2007 to be below 2,000 units, added: ‘Some developers were already marketing their high-end products at the recent Mipim exhibition in Hong Kong to reach an international market.’

It is a strategy that appears to be working.

Savills Singapore director of marketing and business development Ku Swee Yong said he was pleasantly surprised at some of the benchmark prices reached in the high-end sector, with the highest price for the 40-unit Sui Generis at Balmoral Crescent increasing from $2,578 in October to $2,713 psf in November. Six units were transacted in November and the median price rose from $2,406 to $2,474 psf.

Saying that he believes that this end of the market would continue to be driven by international high net worth individuals, he revealed: ‘We had a client who insisted on being first in queue for The Ritz Carlton Residence.’ The client later set a new benchmark price of $4,515 psf for the Cairnhill area.

 

Source: Business Times 18 Dec 07

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