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Thread: New private home sales in August down 15%

  1. #1
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    Default New private home sales in August down 15%

    http://www.straitstimes.com/archive/...wn-15-20140916

    New private home sales in August down 15%

    Only 432 units were sold, but pick-up expected in coming weeks

    Published on Sep 16, 2014 1:09 AM

    By Rennie Whang


    A DOUBLE whammy of tough loan rules and no launches in the Hungry Ghost month belted new home sales last month, but analysts predict a turnaround when more units are released in the coming weeks.

    Only 432 new private homes were moved last month - the lowest since the meagre 259 sales recorded in December last year, which had been a five-year low. This excludes sales at executive condominiums (ECs).

    Last month's total was also 15 per cent down on the 509 sold in July, according to Urban Redevelopment Authority data yesterday.

    Buyers had little to entice them into the market last month with no projects launched, although there were 351 new units released from developments launched previously. "The decline of sales goes hand in hand with the decrease in newly launched units in August, which was mainly due to the subdued sentiment created by the annual Hungry Ghost Festival," said OrangeTee research head Christine Li.

    What sales there were in August were largely in the suburbs.

    The top-selling project was The Panorama in Ang Mo Kio Avenue 2, launched in January. There were 40 units sold at a median price of $1,249 per sq ft (psf).

    Other popular projects included Coco Palms in Pasir Ris Grove, with 23 units sold at a median price of $1,046 psf, and Eight Riversuites in Whampoa East, with 22 sales at $1,345 psf. Coco Palms was launched in May and Eight Riversuites in May 2012.

    The sales lift at projects that have been on the market for some time could be due to developers relaunching at lower prices or with enhanced offerings, said Knight Frank research head Alice Tan.

    Sales at The Panorama, for example, have been consistently good since it was relaunched at lower median prices in May.

    It sold 100 units that month, 49 in June and a further 23 in July after selling none in April.

    Increased incentives to marketing agents may also be spurring buyers, said SLP International research head Nicholas Mak.

    Analysts expect sales to be more robust from this month, with new projects like Seventy St Patrick's, Highline Residences and Marina One Residences expected to launch 800 to 900 units among them.

    EC launches are also expected, with Bellewoods EC lined up for this month and Bellewaters EC next month.

    The two launches follow an absence of new EC releases in the past eight months, said Mr Mak, who added: "Sales of the new EC launches are anticipated to be robust as the pent-up demand is met with pent-up supply."

    There may be more relaunches as well, said Chestertons managing director Donald Han.

    He expects luxury condos like The Crest and Alex Residences to up their marketing game, given the "ground lost" to the 500-unit Highline Residences, which sold about 80 per cent of the first 160 units released last weekend.

    But buying at new launches is likely to remain "fairly muted" due to the total debt servicing ratio (TDSR) framework and property cooling measures, said Ms Tan.

    "Some developers whose projects are in the early planning stages could even be putting off launches until early next year," she added.

    The luxury segment will continue to be hit by "anaemic demand" with TDSR making it hard for potential buyers to get loans for higher value homes, said PropNex Realty chief executive Mohamed Ismail Gafoor.

    Analysts predicted sales this year to range between 8,000 and 9,000. That would be the lowest since the 2008 financial crisis, when developers sold just 4,264 private homes, said Mr Mak.

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  2. #2
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    Default Developer sales fall 15% in August amid slow launches

    http://www.businesstimes.com.sg/arch...nches-20140916

    Published September 16, 2014

    Developer sales fall 15% in August amid slow launches

    By lee meixian

    [email protected] @LeeMeixianBT


    [SINGAPORE] Developers' residential sales continued to languish in August, falling 15 per cent to 432 homes sold as launches were delayed until after the Hungry Ghost Festival.

    This was the lowest number of new private units sold in a month so far in 2014, according to figures from the Urban Redevelopment Authority. It excludes executive condominiums (ECs), a public-private housing hybrid. Including ECs, developers sold 490 homes last month, a 13 per cent drop from July.

    Developers usually avoid launching projects during the Hungry Ghost month because superstitious buyers consider it inauspicious to purchase property during that period. SLP International executive director Nicholas Mak counted 21 days in August that were part of the Hungry Ghost month.

    As a result, only 351 new units were launched in August, a 20 per cent drop from July and the lowest in the year so far. In fact, no new residential project was launched, but only various phases of previous projects were launched.

    For this reason, CBRE research head Desmond Sim thinks that simply looking at the decline in the number of units sold, which is a function of supply, does not offer a full picture. Case in point: when the number of units sold shot up to about 1,500 in May this year in tandem with a spike in launches.

    "If this month the butcher is not selling meat, you can't say no one is buying meat," he said, thus preferring to use a six-month rolling average, which produces a smoother trend line with less volatility and knee-jerk reactions (see chart). But the slow activity can also be put down to buyers taking their time to look over properties while holding out for possible price cuts.

    "In light of the existing total debt servicing ratio (TDSR) ruling and property cooling measures, prospective buyers are maintaining a wait-and-see approach in anticipation of further price changes," Knight Frank Singapore research head Alice Tan said.

    CBRE's Mr Sim agrees that there is no need for buyers to commit very quickly to a project, given the array of options available in terms of location and product type.

    But while developers will probably continue to price their projects competitively to maintain sales momentum, real estate lawyer Lee Liat Yeang, partner at Rodyk & Davidson LLP, believes price cuts, if at all, will not be drastic.

    First, some cannot afford it, having bought the land at high costs. Secondly, its effectiveness is limited, especially when the discount is slight. Thirdly, it might never end; further cuts may be required once units stop moving again. Fourthly, developers also risk upsetting buyers who had bought units earlier.

    "Everybody's waiting for developers to cut prices. The more they cut, the more buyers expect them to cut. It's a psychological mind game which is why I think many developers are not cutting prices," he said.

    In August, suburban projects sold best, making up over half of new private home sales, with Wheelock's Panorama taking the lead (54 units sold). This was followed by Coco Palms (23 units) and Lakeville (21 units). Units at city-fringe project Eight Riversuites at Whampoa East also moved quickly, with 22 units sold.

    The slowdown in the market this year becomes more evident when compared to 2013. From January to August 2014, about 5,600 and 5,350 new private homes have been launched and sold respectively - just about half of the 11,480 and 11,180 units launched and sold in the corresponding year-ago period, noted Mr Mak.

    Consultants expect the full-year number of units sold to range from 8,000 to 9,000. Sales and launches in September are expected to improve with the launch of Keppel Land's Highline Residences, as well as the expected launches of Marina One Residences, 70 St Patrick's and Bellewoods EC.

    Already, Highline Residences, which began closed-door sales over the weekend, has sold more than 80 per cent of its 160 launched units at an average S$1,900 per square foot (psf) after discount.

    Marina One Residences also held a private preview of its show gallery on Saturday. Sales have not started but prices will likely average S$2,600 psf. 70 St Patrick's is also open for advance showflat viewing now.

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