Ghost Month sneaks up on slow market
http://www.businesstimes.com.sg/sub/...92548,00.html?
Published August 16, 2008
Ghost Month sneaks up on slow market
Home sales volume in July down 35% year-on-year, but does better month-on-month with 12% rise
By ARTHUR SIM
(SINGAPORE) One year after the onslaught of the US sub-prime mortgage crisis, the Singapore property market is still looking weak. And property consultants are expecting sales to slow further, exacerbated by the start of the Chinese Hungry Ghost Month.
According to developer sales figures from the Urban Redevelopment Authority (URA), new home sales fell about 35 per cent in July to 897 units on a year- on-year basis. This is also sharper than the 30 per cent year-on-year fall in June.
However, on a month- on-month basis, the July volume increased 12 per cent, largely attributed to the 1,322 new home units launched in the month - the highest since August 2007, when 1,885 units were launched.
The number of units launched in July was also 1.4 per cent higher compared to a year ago and about 20 per cent higher compared to the previous month.
But Knight Frank director of research and development Nicholas Mak notes that the ratio of new home sales to newly launched units increased to 1:1.47 compared to 1:0.9 a year ago and 1:1.33 in the previous month. He said: 'As a result, the stock of unsold homes in the developers' inventory will gradually increase.'
That the 897 new homes sold in July exceed the 10-year monthly average of about 680 units should bode well for the market. But Mr Mak says the ratio of new home sales to newly launched units suggests that take-up is not that healthy. 'It's like whether you choose to judge someone's health by his blood pressure or his temperature,' he added.
At end-December 2007, there were about 4,000 units of new homes ready for sale that had not been launched. This increased to more than 6,500 units in March and about 7,000 at end-July.
Still, Mr Mak points out that the healthy sales volume for July does suggest that 'there is underlying demand from owner-occupiers'.
This demand came for the Outside Central Region (OCR). Knight Frank notes that the 636 units launched in the OCR accounted for 48.1 per cent of launches in July.
The Core Central Region (CCR), in comparison, saw launches fall 40.7 per cent month-on-month and accounted for 9.9 per cent of all launches in the month.
Jones Lang LaSalle local director and head of research (South East Asia) Chua Yang Liang believes that looking at the islandwide take-up may not be an accurate reflection of the market.
Looking at the lowest price band of reported monthly median prices - 'because it is more reflective of the underlying market sentiment' - Dr Chua noted that in July, the CCR and OCR registered declines of 7 per cent and 23 per cent respectively (excluding projects with single transactions).
Dr Chua said the Rest of Central Region (RCR) appeared stable, registering a marginal increase of 2 per cent month-on-month in July to $560 per square foot.
The major launches in OCR include Livia, which sold at a median price of $671 psf while Kovan Residences sold at a median price of $882 psf. 'We reckon the price of $650-$850 psf is what the market is comfortable with at this point,' added Dr Chua.
CB Richard Ellis Research executive director Li Hiaw Ho reckons prices are still holding in some areas. 'In suburban areas such as Serangoon, Sengkang and Jurong, prices are observed to be holding at $800-$950 psf at The Florentine, Kovan Residences, Woodsville 28, $700-$800 psf at The Quartz, and $800-$900 psf at The Lakeshore,' he added.
Mr Li also noted that five units in The Hamilton Scotts transacted at $3,000-$3,676 psf and seven units in Nassim Park Residences were done at $2,600-$3,650 psf. Mr Li said: 'This shows that there are people who are willing to pay a premium for projects in very good locations and/or with strong attributes.'
Savills Singapore director of marketing and business development Ku Swee Yong believes that developers are also likely to continue with a 'wait and see' strategy regarding launches. 'Every month that a developer waits, there are new buyers entering the market,' he said.
Mr Ku was pleasantly surprised by the take-up in July too. He said: 'I think developers launching a total of between 1,000 and 1,500 units per month is sustainable.'
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Home sales up; pace slowing
http://straitstimes.asiaone.com/Brea...ry_268722.html
August 16, 2008 Saturday
Home sales up; pace slowing
Prices slip in July though sales up for 3rd straight month; high-end hard hit
By Fiona Chan, Property Reporter
NEW home sales rose last month for the third month in a row, but the pace of growth braked sharply and the prices of sold homes slipped.
Developers sold 897 new private homes in July, 12 per cent more than in June and the highest number since last August, according to data released by the Urban Redevelopment Authority yesterday.
Close to nine out of every 10 homes sold last month were suburban units that cost $1,000 per sq ft (psf) or less. No homes were sold above $4,000 psf for the second consecutive month.
This trend is likely to continue, property consultants said, as persistent caution in the high-end market is causing developers to delay expensive launches.
Even then, developers continued to launch more units across the board than they were able to sell last month, adding to the inventory of unsold homes, observed Mr Nicholas Mak, director of research and consultancy at Knight Frank.
Consultants also predicted that the pattern of rising sales will be reversed this month.
Launches and transactions will probably fall thanks to the perceived unlucky 'Hungry Ghost' period, while market sentiment is expected to remain negative amid more dismal global economic news coming out of the United States and Europe.
Already, last month's sales growth was a far cry from the 77 per cent jump in sales between May and June, consultants said.
Last month's figures were boosted by sales from four large-scale suburban projects that together accounted for almost two-thirds of the whole month's deals. Livia in Pasir Ris saw 301 apartments taken up, at a median price of $671 psf. Of these, four crossed the $750 psf mark, but the rest were well within the $500 to $750 psf range.
Clover by the Park in Bishan sold 100 units at a median price of $753 psf, down slightly from the median $765 psf it had fetched in June.
And Kovan Residences in Kovan Road sold 87 units at a median price of $882 psf - just below its $887 psf in June - while Beacon Heights in St Michael's Road sold 61 units at a median price of $865 psf.
In the mid-tier segment, Parc Sophia in Dhoby Ghaut was the best performer, selling 25 units at a median price of $1,503 psf.
CapitaLand's Wharf Residences near Robertson Quay sold 23 units at a median price of $1,506.
Generally, prices have come under pressure from the gloom in the market and are starting to dip, consultants said.
The lowest transacted price in the suburban region fell 23 per cent last month from June, while the lowest price in the central region fell 7 per cent, noted Dr Chua Yang Liang, Jones Lang LaSalle's head of South-east Asia research.
He said buyers of suburban projects are probably comfortable with paying $650 to $850 psf right now, while those looking for well-located city-fringe homes have budgets of $850 to $1,000 psf.
Sales were dismal in the high-end segment, with only eight units - less than 1 per cent of total sales - transacted above $3,000 psf. At the height of the property fever in July last year, 217 units fetched more than $3,000 psf, accounting for more than 15 per cent of the total units sold then.
But there are still some buyers willing to pay a premium for prime projects, said Mr Li Hiaw Ho, executive director of CB Richard Ellis Research.
He noted that five units were sold at The Hamilton Scotts in Scotts Road, for between $3,000 and $3,676 psf.
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