Jan home sales jump on pricier platform

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Published February 18, 2010

Jan home sales jump on pricier platform

Big turnaround after blip of last year's Q4; choice locations feel the buzz too

By KALPANA RASHIWALA


(SINGAPORE) The private housing market has entered the year on a firm footing, with developers' home sales in January rising to 1,476 units - three times as high as the previous month. They also hit their highest level since August last year.

Of the units launched in January as well as units sold in the same month, about half were in the Core Central Region, reflecting a revival in activity in the choicest housing locations in Singapore. Another interesting statistic gleaned from the latest monthly data released by the Urban Redevelopment Authority (URA) yesterday is that 76 per cent of the total units sold in January were priced at at least $1,000 per square foot (psf). Such a high proportion has not been seen since URA began releasing such data in June 2007, observes property agency PropNex CEO Mohamed Ismail.

Industry players expect this trend to continue for the rest of 2010, pointing to high land prices achieved at state tenders late last year, which would translate into higher target selling prices by developers.

As a developer put it: 'Increasingly, people will accept that $1,000 psf is not a shocking price for mass-market private homes anymore.' He acknowledged, however, that further price increases in this segment will be checked by what HDB upgraders can afford.

Also, many expect sales volumes and price gains this year to shift to the mid and higher price segments, hence supporting a bigger proportion of higher-priced transactions.

It was not price reduction but more launch activity that helped raise developers' January sales volume, notes real estate lecturer Nicholas Mak. 'Average prices in many recently launched projects either increased marginally or remained unchanged,' he added.

A brighter economic outlook and pent-up demand after low sales in Q4 last year also gave January numbers a push, felt CB Richard Ellis (CBRE) executive director Li Hiaw Ho. 'The 1,476 units sold in Jan 2010 alone is about 80 per cent of the 1,860 new homes sold in the entire fourth quarter of 2009,' he said.

House-hunters also moved after noting that the government's property-cooling measures last September did not translate into price reductions, noted Knight Frank chairman Tan Tiong Cheng.

CBRE's Mr Li said the stronger sales volume in January was also partly driven by anticipation of a possible price hike in the mid and high-end segments this year.

The 1,476 private homes (excluding executive condos) developers sold last month was triple the 481 units sold in December last year. The latest January number is nearly 14 times the 108 units sold in January last year.

Developers launched 1,424 private homes last month, almost double the December figure of 734 units, according to URA.

Industry observers also say private home-buying activity is being driven mostly by investment demand rather than owner occupation. 'We're getting a lot of interest from mainland Chinese buyers because luxury home prices in Singapore have not recovered to the extent seen in gateway Chinese cities and Hong Kong,' says DTZ executive director Ong Choon Fah.

CBRE predicts URA's overall private home price index could appreciate 8 to 10 per cent in 2010 after last year's 1.8 per cent rise.

Developers are expected to rev up launches in the coming weeks. 'Some developers who were supposed to have released projects before Chinese New Year held back their launches, for greater clarity on the price of land when the first few state land tenders this year close,' said a senior executive with a major developer. Assuming land costs remain firm, that will give developers greater confidence in pricing their end units, he added.

Low interest rates and improving sentiment will support buying interest from Singapore residents as well as foreigners this year, he argues.

January's top-selling projects in the primary market were Cube 8 at Thomson Road (167 units), The Shore Residences in the Katong area (144 units), RV Edge along River Valley Road (91 units), Urban Suites in the Cairnhill area (88 units) and Parvis at Holland Hill (73 units).

The lowest psf price for a developer sale last month was for a unit sold at $544 psf at Oasis @ Elias; the highest price, $3,243 psf, was for an Orchard View unit.

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Feb 18, 2010

Roaring start for sales of new private homes

Jan figures up sharply on Dec; about half of units sold are in prime areas

By Jessica Cheam


SINGAPORE'S private property market is off to a strong start this year, with new-home sales in January coming in at a record-setting pace.

The Urban Redevelopment Authority (URA) said yesterday that 1,476 new homes were sold last month, sharply higher than the 481 units sold in December and 601 sold in November.

It is also the first time monthly sales figures have risen since July last year.

In fact, January's sales were so exuberant that buyers bought more units than the number launched by developers that month.

They also set a faster pace than the average 1,230 units sold per month in 2007 - a year which saw a record 14,811 new homes snapped up.

Property analysts said yesterday that this has set the tone for this year. Demand for new homes is expected to be strong, especially in the higher-end segments of the market.

URA figures seemed to confirm this trend. Almost half of the new homes sold - 699 units - were in prime areas such as Cairnhill and Holland Road, otherwise known as the core central region.

The region saw the largest jump in number of units launched and sold. Developers launched almost five times the number of units - 690 in January, up from 126 in December - while the number sold tripled in January from 218 in December.

By comparison, mass market or suburban condominiums, which drove the property boom last year, accounted for just 29per cent of the units sold last month.

PropNex chief executive Mohamed Ismail said: 'The middle- to high-end markets are certainly moving. Some 76per cent of homes were sold at above $1,000 per sq ft (psf), a proportion not seen for over 30 months.'

CBRE Research executive director Li Hiaw Ho said that a positive economic growth forecast for this year and pent-up demand following sluggish sales in the last three months of last year could have contributed to the sterling start.

Prime property sales were led by RVEdge in River Valley, where 91 units were sold at a median price of $1,696 psf, and Urban Suites in Cairnhill, where 88 units were sold at a median of $2,506 psf.

URA's figures showed that another 350 homes sold were in the city-fringe areas, led by City Developments' Cube8 in Thomson Road - January's top-seller. Out of 177 Cube8 homes launched, 167 units sold at a median price of $1,286psf.

Far East Organization's The Shore Residences, in the East Coast, also did well, with 144 units sold out of 202 launched, at a median psf price of $1,200.

CBRE's Mr Li noted that, in general, the smaller one- or two-bedroom units continued to be popular because they cost less in absolute terms.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak added that based on caveats that have come in for January so far, the resale market is also showing similar strong volume.

But for now, prime properties are nowhere near the record-breaking levels of the last property peak in 2007. Last month's sales did not see any homes priced above $4,000 psf, he noted.

In a separate report released yesterday, property consultancy DTZ Research said that the move towards higher-priced homes was already evident in the last quarter of last year, when home purchases of $3million and above made up 8per cent of all transactions, inching up from 7per cent in the previous quarter.

DTZ agreed that the high-end segment will see greater price appreciation this year. But it said that a runaway increase in prices is not likely as concerns like credit tightening in China and weak consumer demand in the US and Europe remain.

Following the Chinese New Year holiday, developers are expected to launch more projects, such as The Estuary in Yishun and Sentosa Quayside.

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