Published July 4, 2007

Take-up of new homes headed for a record

Number sold this year could hit 11,700-16,500, beating last year's high of 11,147


(SINGAPORE) Sales of new homes are set to hit a new high this year as developers line up as many as 7,000 units to be launched in the second half of 2007.

Experts predict that the number of new homes sold this year could be between 11,700 and 16,500 - overtaking the 11,147 new homes sold in 2006, which was itself a historical high.

'If everything on paper goes according to plan, the number of new homes sold this year could beat last year's figure,' said Joseph Tan, executive director for residential at CB Richard Ellis (CBRE). 'But some of the developers could hold back their launches if they think prices are going to go up next year.'

Mr Tan estimates that about 4,900 new homes will be sold in the second half of this year, assuming a take-up rate of 70 per cent for the estimated 7,000 units that could be launched. In addition to the 9,100 units sold in the first half, the take-up of new homes in 2007 will come to 14,000.

Knight Frank, which has a more bullish estimate of 15,500-16,500 new homes sold this year, echoed his sentiment. The property firm's head of consultancy and research, Nicholas Mak, said: 'We will see another record year if developers launch 6,000-7,000 homes in the second half of the year.'

Data compiled by CBRE shows that as many as 47 projects with an estimated 7,000 units will be offered to home buyers over the next six months. And of this amount, about half - 27 projects with a total of 3,500 units - will either be in the prime districts 9, 10 and 11 or in new property hotspot Sentosa.

At least for the rest of this year, developers are still banking on the prime districts to draw in buyers - even though the mass market is also recovering.

Over the past two years, prices in the core central region of Singapore - which includes Districts 9, 10, 11, Marina Bay and Sentosa - have climbed much faster than prices elsewhere on the island.

But the latest official estimates released on Monday show that the mass market is finally beginning to catch up - data from the Urban Redevelopment Authority (URA) put the increase of home prices in the 'outside central region' category at 6.5 per cent over the second quarter, just slightly under the 7.6 per cent climb seen in the core central region.

As mass market home prices pick up, developers should start to launch more projects in the suburban areas, observers predict.

'We might begin to hear more of the mass market next year, especially in the second half,' said Chua Yang Liang, head of Singapore research at Jones Lang LaSalle.

This is especially so when considering the latest government land sales programme, Dr Chua said. In the land sales programme for second-half 2007, the government is offering 20 residential sites, all suitable for mass market homes.

Some of the sites are quite large. A 1.75 ha site at Simon Road near Kovan MRT station, due to be launched in August, could yield about 555 homes.

The authorities are committed to ensuring a sufficient supply of residential space to meet demand, the URA said on Monday.