Private home sales down in January but more units launched
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Private home sales down in January but more units launched
By Wong Siew Ying/ Ng Baoying, Channel NewsAsia | Posted: 16 February 2009 1635 hrs
SINGAPORE: Private home sales further slowed in January, according to the latest Urban Redevelopment Authority (URA) figures. Some 107 deals were completed last month, compared to 131 in December.
Property agents said this was the lowest level recorded in the last two years - even lower than last October when global stock markets slumped.
Even so, developers placed more projects on the market, with 204 units released in January. This was slightly higher than the 157 private homes released a month earlier, which had been the lowest level since June 2007.
Despite these gloomy numbers, real estate agency Propnex Realty expects a brighter February. The firm said this is because there has been good take-up from some recent launches this month.
For instance, the new developments Alexis and Caspian had enjoyed strong take-up with over 750 units sold.
CEO of PropNex Realty, Mohamed Ismail, said: "February has been a good month and is likely to post a record number of transactions, far exceeding the peak of last year - close to 800 over units." This will be about eight times the number sold in January.
According to property consultant Colliers, potential buyers would have been waiting for the Budget announcement before making any purchase, and were also occupied with preparing for the Lunar New Year.
But while sales were seen picking up, analysts said one trend would likely persist throughout the year.
Director of consultancy and research at Knight Frank, Nicholas Mak, said: "Most units launched and sold by developers last month were in the suburban areas. Launch and sales activities by developers in the prime district almost came to a halt. Less than 10 units were transacted."
Mohamed Ismail said: "The appetite for many consumers today is when the property price, the overall quantum is less than S$800,000. There are many people willing to buy.
"Not only from the perspective of consumers, even financial institutions and the banks are very comfortable to lend to people for property that are below a million because the risk and spread for the bank is so much better."
Thus analysts expect most upcoming launches to fall under this category. They said developers may ride the new wave of sales and launch more units in the second half of February.
They said as many as 1,000 units may be launched next month, a level not seen since July 2008.
And to support sales, analysts said that going forward, developers are likely to work with banks on financing schemes. For example, two recent developments launched - Alexis and Caspian - have interest-absorption schemes.
- CNA/yt
Property players look beyond black January
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Published February 17, 2009
Property players look beyond black January
Some see light at end of tunnel for home sales volume if pricing is right
By KALPANA RASHIWALA
(SINGAPORE) As they say, it is always darkest before the dawn. So it may be with the 107 private homes that developers sold last month.
The number is the lowest since the government started making available monthly home sales data in June 2007, and could mark the nadir in sales volume, property industry players reckon.
House-hunting season has just begun for the year, and buyers are expected to scoop up units in projects with appealing locations, as developers continue to price projects attractively, especially in the mass-market segment. Interest absorption schemes being offered by developers will help ease home purchases in the months to come, property consultants say.
In the first two weeks of this month alone, developers are estimated to have sold around 800 to 850 private homes, mostly from the newly launched Caspian and Alexis condos; even assuming there are no other major new launches for the rest of February, the full month's tally is expected to reach around 1,000 units. This would be the highest monthly sales figure since August 2007, notes Colliers International director Tay Huey Ying.
Home buyers can expect more offerings soon. UOL Group is said to be readying for launch next month its Double Bay condo in Simei; Far East Organization and Frasers Centrepoint, too, are expected to release a new batch of units at Waterfront Waves in Bedok in March. The latest units, which will mostly have pool views, are expected to be priced in the low-$600 per square foot (psf) range and be more appealing price-wise than the average $750 psf for reservoir-facing units released last year.
The number of 204 private homes that developers launched last month was higher than the December 2008 figure of 157 units.
'Going forward, there'll be periodic bursts of launch activities as there would be some buyers willing to commit to a purchase if they believe the price is affordable,' says Knight Frank director Nicholas Mak.
DTZ senior director (research) Chua Chor Hoon predicts developers will launch 5,500 to 6,500 private homes this year, mainly in the mass-market segment. Primary market home sales could come in at about 5,000 to 6,000 units - higher than last year's 4,264 units.
DTZ forecasts that prices in the mass-market segment could slip about 10-15 per cent this year, after a 10.5 per cent fall last year. It is predicting bigger price drops of 15 to 20 per cent for the prime districts and about 30 per cent in the luxury segment this year.
Colliers' Ms Tay says: 'Pent-up demand is expected to surface in the coming months, albeit buyers' cautious stance amid the grim economic outlook will contain demand to properties worth below $800,000 as evidenced by the good take-up for the 712-unit Caspian (in Jurong Lake District) and the 293-unit Alexis at Alexandra Road.'
Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong, who estimates developers could sell 5,000-odd private homes this year, says: 'The three key factors that will affect home sales in 2009 will be interest rates on housing loans, jobs and pricing.'
Knight Frank executive director Peter Ow says there's probably more leeway for developers to price new projects attractively than to chop prices of a project already on the market as they will face pressure from earlier buyers
In any case, chopping prices is not always a cut-and-dry affair for a developer, as a property consultant points out: 'It's a delicate balance. If you cut prices just a little, people may not buy; but if you cut too much, you may frighten off potential buyers.'
Urban Redevelopment Authority's data yesterday on developers' launches and sales showed that overall median prices for most private residential projects continued to ease in January over the preceding month 'as developers were more realistic in their pricing in the hope of maintaining demand', according to Jones Lang LaSalle's head of research (SE Asia) Chua Yang Liang. For example, the median price for The Aristo @ Amber eased 1.2 per cent month on month to $990 psf in January. Nova 88 in the Balestier area too saw its median price soften 4.2 per cent to $947 psf, while Rosewood Suites in Woodlands recorded a 16.7 per cent contraction in median price to $545 psf in January.
'This analysis doesn't factor in price differentiation as a result of differences in the unit's orientation, floor level, size, etc,' Dr Chua adds.
Property consultants were not surprised by January's weak homes sales, attributing it to the Chinese New Year festivities and potential buyers being further drawn to the sidelines with their eyes glued to the Singapore Budget announcement.
Only 13 units were sold in the Core Central Region last month; Rest of Central Region and Outside Central Region had similar shares, at 49 and 45 units respectively.
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