Published June 26, 2007

Tight supply could see lower sales in Q2: CBRE

Residential prices expected to continue rising 4-6%, says CBRE


(SINGAPORE) The number of new homes sold in the second quarter of 2007 could exceed 4,300 units, but still less than the 4,800 homes sold in the first quarter, according to a new report released yesterday.

And third quarter sales are expected to be even lower than in the second quarter.

Property consultancy CB Richard Ellis (CBRE) expects the number of homes sold in the second quarter to fall - even as demand stays strong - mainly due to tight supply in the residential market.

Joseph Tan, CBRE's executive director for residential, attributed the lower home sales from April to June to fewer launches of larger projects, as well as fewer launches overall.

'There will be fewer launches,' Mr Tan said. 'Also, projects in the prime areas are getting smaller (in terms of the number of units) rather than larger.'

The drop in take-up rates for homes will continue into the third quarter, when the number of homes sold will exceed just 3,000, CBRE said.

Home prices, on the other hand, are expected to continue climbing in the second quarter.

'We expect the overall price increase in the Urban Redevelopment Authority (URA) residential price index to be around 4 per cent to 6 per cent for the second quarter,' CBRE said. The URA price index rose 4.8 per cent in the first quarter of 2007.

And CBRE also expects the positive uptrend to continue in the third quarter. Said Mr Tan: 'The take-up of new homes is likely to exceed 3,000 units while home prices may continue to head up by another 3 per cent to 5 per cent in the next quarter.'

Developers will offer a variety of projects as they take advantage of the strong demand for new homes over the next quarter, said CBRE.

In the high-end segment, Hilltops, Scotts Square and a 99-year leasehold condominium at Marina Collection may be launched.

In the prime and mid-tier segments, condominium projects at Sinaran Drive (99-year leasehold), Jalan Mutiara (site of former Dragon View Park) and Meyer Road (site of former Eastern Mansion) are expected to be put on the market. Suburban projects such as the condominium on the former site of Westpeak in West Coast Walk and Versilia On Haig may also be launched.