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Thread: Gone fishing ... waiting for lower home prices

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    Default Gone fishing ... waiting for lower home prices

    http://www.businesstimes.com.sg/sub/...46340,00.html?

    Published July 16, 2011

    Gone fishing ... waiting for lower home prices

    Sales of private homes down in June, as buyer caution and the school holidays weigh in

    By KALPANA RASHIWALA


    A SHARP slowdown in private home sales last month also carried with it a stark message for developers: they will have to keep a close watch on pricing if they choose to roll out more projects in the months ahead.

    This view was echoed by property consultants after official numbers yesterday from the Urban Redevelopment Authority showed that the number of private homes (excluding executive condos or ECs) sold dropped 25 per cent month-on-month to 1,182 in June. This marks the second consecutive monthly decline and takes the figure for the second quarter to 4,562 units. The final tally (factoring in returned units) will be released by URA on Friday, July 22.

    The preliminary Q2 figure (compiled from adding up monthly sales from April to June) is nearly 27 per cent ahead of the final figure for the first quarter of 3,595 units. The 8,157 units sold in H1 is in the ballpark of the 8,413 private homes sold in H1 last year and 7,879 units in H2 last year.

    Market watchers were not surprised by June's slower sales - which they attributed to the mid-year school holiday season when many families are overseas, price resistance and buyer caution. As Jones Lang LaSalle SE Asia research head Chua Yang Liang puts it: 'Home buyers are holding back their purchases, confident that the new National Development Minister Khaw Boon Wan's leadership would bring home prices to a more affordable level in the near future.'

    Some players also said that greater 'price sensitivity' has set in among buyers. Colliers International analysis showed that nearly half of the 1,182 private homes which developers sold in June were priced at no more than $1,000 per square foot. The Outside Central Region (OCR) continued to make up the lion's share, accounting for 70.5 per cent of units sold. It also made up nearly 70 per cent of the 1,614 private homes that developers launched last month. That is the result of the substantial amount of land sold at state tenders, which provide private housing land mostly in OCR to cater to strong demand for suburban entry-level private homes.

    Credo Real Estate executive director Ong Teck Hui says: 'Going forward, it could be a more difficult period for developers as they decide on whether to launch new projects and at what prices. Some may prefer to wait and see and pull back on new launches if they assess that demand is being adversely affected by current market conditions. If this happens, it will increase the build-up in unsold inventory.'

    On the other hand, it is precisely to avoid being forced to launch projects later, when market conditions may worsen, that some developers may still go ahead with launches in the coming months, he reckons. 'Pricing will be key; if you are prepared to price realistically you can still move units.'

    Wendy Tang, Knight Frank executive director of residential services, also points out that developers will still have to roll out projects as soon as possible, especially those on sites which they had bought at state tenders due to the stipulated five-year timeframe for project completion.

    'But developers may slow down when it comes to tendering for new sites. They may become more selective about the sites they bid for and cautious with their land bid prices, taking into account an expected increase in construction costs - partly due to the ramping-up in building of public housing flats. Also, developers may not be able to raise selling prices on their projects as buyers are more cautious.'

    Analysts point to worries about the economic situation in the US and Europe, the sharp slowdown in Singapore's economic growth in Q2 and concerns about the impact of the record supply of public housing on upgrader demand in the private housing market.

    CB Richard Ellis executive director (residential) Joseph Tan acknowledges that affordability remains a concern in the mass-market segment. 'Developers will manage this by keeping three-bedroom family-sized units compact at around 1,000 sq ft and priced below $1 million.'

    URA's numbers show that the 1,614 private homes (excluding ECs) that developers launched in June was 32.8 per cent higher than the 1,215 units they released in May.

    Developers did not launch any new EC projects last month. However they continued to sell units in earlier projects such as Belysa in Pasir Ris (153 units sold in June) and Austville Residences in Sengkang (28 units). Total sales including ECs was 1,394 units in June, a 23.6 per cent drop from May's sales volume of 1,825 units.

    ECs are a hybrid of private and public housing with buyer eligibility and resale conditions which are completely lifted 10 years after an EC project is completed.

    Excluding ECs, the top-selling private housing project last month was Woodhaven in the Woodlands area (155 units at a median price of $981 psf), followed by The Miltonia Residences in Yishun (149 units at a median price of $877 psf), Seastrand in Pasir Ris (120 units at a median price of $879 psf) and Sims Edge at Lorong 33 Geylang, a shoebox development which saw 77 units transacted at a median price of $1,329 psf.

    The priciest unit sold by a developer in June was $4,362 psf for a unit at Wing Tai's Le Nouvel Ardmore in the posh Ardmore Park area. UOL also found buyers for the last three units at its 100-unit Nassim Park Residences at $3,642-$3,997 psf. Wheelock Properties sold a Scotts Square unit for $3,690 psf. SC Global Developments sold a unit at Seven Palms Sentosa Cove for $3,606 psf.

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    Default Re: Gone fishing ... waiting for lower home prices

    Should have turn to stone now if still fishing.
    The Best Time to buy Property is Yesterday.
    If you lose Money it because you sell on a wrong Day.

    https://wa.me/6587821025

    https://r057844h.propnex.net/

    You don't Buy others will Buy.
    You don't Sell, others will Sell.

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