reporter2
23-02-15, 18:16
http://www.straitstimes.com/archive/tuesday/premium/money/story/more-new-homes-sold-jan-volume-still-weak-20150217
More new homes sold in Jan but volume still weak
Published on Feb 17, 2015
By Cheryl Ong
HOME buying picked up the pace in January but volumes remain weak compared with a year ago.
Buyers snapped up 372 units last month, up 62 per cent over the 230 units sold in December, the Urban Redevelopment Authority said yesterday.
The uptick "was a function of supply", said experts, as developers put up 415 new units for sale last month - well up from 53 units in December. But the sales tally was still 35 per cent lower than for the same period a year earlier and under the monthly average of 610 units sold last year.
Analysts say demand has been subdued because of a stalemate between buyers and sellers since tougher mortgage rules - the total debt servicing ratio (TDSR) - made it harder to obtain loans.
Ms Christine Li, research head at Cushman & Wakefield, said: "Prices have not corrected in line with the reduced affordability of the buyers due to the TDSR."
Last month's bestseller Symphony Suites, for instance, moved just 54 of 660 units in the month despite a median selling price of $1,010 per sq ft (psf), which was at the "lower end" of market expectations.
Developers are mindful of strong headwinds in the market due to an impending interest rate hike as well as a deluge of new supply this year, said experts.
Although they have timed their launches strategically to avoid undercutting from projects nearby, developers are likely to keep prices at new launches "elevated" after paying hefty sums for land in the past 11/2 years.
Buying in the suburbs was strongest last month, accounting for 62 per cent of sales.
City-fringe units made up 28 per cent, underpinned by CapitaLand's 124-unit project Marine Blue in East Coast Road, where 32 units were sold at a median price of $1,829 psf.
City-centre homes accounted for 10 per cent.
While new launches were subdued, demand picked up at some older projects.
At Roxy-Pacific's 222-unit Trilive in Kovan - the third bestseller - 22 units were sold at a median of $1,562 psf, though it was launched in June last year.
The developer said in November that it would reduce prices of selected units by about 8 per cent.
Similarly, MCL Land's 696-unit Lakeville in Jurong - launched in April last year - moved 20 units at a median of $1,378 psf.
This reflects an underlying demand for residential units, said Mr Desmond Sim, research head at CBRE Southeast Asia. "Buyers now have a wider range of projects to choose from; more sales could be inked if pricing is more competitive," he added.
If executive condos (EC) are included, 556 units were sold last month.
The Amore, a Punggol EC by Keong Hong Holdings, Master Contract Services and JBE Holdings, sold 83 units at $795 psf.
[email protected]
More new homes sold in Jan but volume still weak
Published on Feb 17, 2015
By Cheryl Ong
HOME buying picked up the pace in January but volumes remain weak compared with a year ago.
Buyers snapped up 372 units last month, up 62 per cent over the 230 units sold in December, the Urban Redevelopment Authority said yesterday.
The uptick "was a function of supply", said experts, as developers put up 415 new units for sale last month - well up from 53 units in December. But the sales tally was still 35 per cent lower than for the same period a year earlier and under the monthly average of 610 units sold last year.
Analysts say demand has been subdued because of a stalemate between buyers and sellers since tougher mortgage rules - the total debt servicing ratio (TDSR) - made it harder to obtain loans.
Ms Christine Li, research head at Cushman & Wakefield, said: "Prices have not corrected in line with the reduced affordability of the buyers due to the TDSR."
Last month's bestseller Symphony Suites, for instance, moved just 54 of 660 units in the month despite a median selling price of $1,010 per sq ft (psf), which was at the "lower end" of market expectations.
Developers are mindful of strong headwinds in the market due to an impending interest rate hike as well as a deluge of new supply this year, said experts.
Although they have timed their launches strategically to avoid undercutting from projects nearby, developers are likely to keep prices at new launches "elevated" after paying hefty sums for land in the past 11/2 years.
Buying in the suburbs was strongest last month, accounting for 62 per cent of sales.
City-fringe units made up 28 per cent, underpinned by CapitaLand's 124-unit project Marine Blue in East Coast Road, where 32 units were sold at a median price of $1,829 psf.
City-centre homes accounted for 10 per cent.
While new launches were subdued, demand picked up at some older projects.
At Roxy-Pacific's 222-unit Trilive in Kovan - the third bestseller - 22 units were sold at a median of $1,562 psf, though it was launched in June last year.
The developer said in November that it would reduce prices of selected units by about 8 per cent.
Similarly, MCL Land's 696-unit Lakeville in Jurong - launched in April last year - moved 20 units at a median of $1,378 psf.
This reflects an underlying demand for residential units, said Mr Desmond Sim, research head at CBRE Southeast Asia. "Buyers now have a wider range of projects to choose from; more sales could be inked if pricing is more competitive," he added.
If executive condos (EC) are included, 556 units were sold last month.
The Amore, a Punggol EC by Keong Hong Holdings, Master Contract Services and JBE Holdings, sold 83 units at $795 psf.
[email protected]