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Record sales of new private homes in 2007

Total of 14,826 sold, mostly in first nine months, before sales slid sharply at year-end

HOMEBUYERS picked up a record number of new private homes last year – before demand dipped sharply at year-end.

They bought 14,826 new homes in the year, up from 11,147 the year before, according to the latest figures from the Urban Redevelopment Authority (URA).

This all-time high figure was boosted by sales in the first nine months, when 90 per cent of last year’s deals were done, said property consultancy CB Richard Ellis (CBRE).

Demand then went into a freefall in the last months of the year amid a slew of worries, including concerns over the United States sub-prime mortgage crisis.

New home sales, which had averaged 1,480 a month between January and September, fell to below 600 per month in October and November.

Last month, a mere 305 deals were done, the lowest number since the URA started tracking monthly new home sales in June. All the figures exclude executive condominiums.

December also saw a dip in the median price of new homes. Price gaps within each category of new homes also narrowed, said consultancy Jones Lang LaSalle (JLL). It noted that the gap between the highest and lowest prices for city-centre and mid-tier homes narrowed to its smallest in recent months.

But the year-end decline was ‘expected’, said JLL’s head of Singapore research, Mr Chua Yang Liang. He said the ‘looming uncertainty from the US sub-prime issue’, coupled with the usual ‘lull period’ in December led to fewer launches of new projects and fewer home sales.

Developers tend to launch fewer projects at the end of the year because of the holidays. They launched only 1,673 units in the fourth quarter last year, about a third of that in each of the first three quarters.

But a bigger reason for the slowdown could be the fact that recent asking prices have soared so much, said Mr Ku Swee Yong, director of business development and marketing at Savills Singapore. ‘A lot of recent new home transactions are at record-high prices,’ he said.

Last year, developers sold almost 200 new homes at more than $4,000 per sq ft (psf), Savills said – a level never reached in previous years.

Even in December, three units at the Ritz-Carlton Residences in Cairnhill went for more than $5,000 psf.

Units at the Marina Collection also fetched record prices for Sentosa Cove last month at a median price of $2,734 psf, said CBRE.

‘There is now a 15 to 20 per cent gap between what developers are asking for and what buyers seem willing to pay,’ Mr Ku said.

This has led to a ‘stand-off’ and a more cautious mood among buyers which may persist well into this year, he added.

Already, the median prices of new uncompleted units have started to slide, said Knight Frank. They eased from $1,110 psf in November to $1,063 psf last month.

New home sales last month dropped off most in the mid-tier and suburban regions, consultants said.

Only 56 mid-tier units were sold in December, 80 per cent less than in November. For suburban projects, the number of units sold fell 35 per cent to 60.

In the prime city centre, new home sales jumped 36 per cent to 175, boosted by a bulk purchase of 97 units in Goodwood Residences at a median price of $3,200 psf.

New launch Zenith in Zion Road also helped city-centre sales, with 37 units sold at a median price of $1,665 psf.

 

Source: The Straits Times 16 Jan 08

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