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Thread: More new homes sold in Jan but volume still weak

  1. #1
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    Default More new homes sold in Jan but volume still weak

    http://www.straitstimes.com/archive/...-weak-20150217

    More new homes sold in Jan but volume still weak

    Published on Feb 17, 2015

    By Cheryl Ong


    HOME buying picked up the pace in January but volumes remain weak compared with a year ago.

    Buyers snapped up 372 units last month, up 62 per cent over the 230 units sold in December, the Urban Redevelopment Authority said yesterday.

    The uptick "was a function of supply", said experts, as developers put up 415 new units for sale last month - well up from 53 units in December. But the sales tally was still 35 per cent lower than for the same period a year earlier and under the monthly average of 610 units sold last year.

    Analysts say demand has been subdued because of a stalemate between buyers and sellers since tougher mortgage rules - the total debt servicing ratio (TDSR) - made it harder to obtain loans.

    Ms Christine Li, research head at Cushman & Wakefield, said: "Prices have not corrected in line with the reduced affordability of the buyers due to the TDSR."

    Last month's bestseller Symphony Suites, for instance, moved just 54 of 660 units in the month despite a median selling price of $1,010 per sq ft (psf), which was at the "lower end" of market expectations.

    Developers are mindful of strong headwinds in the market due to an impending interest rate hike as well as a deluge of new supply this year, said experts.

    Although they have timed their launches strategically to avoid undercutting from projects nearby, developers are likely to keep prices at new launches "elevated" after paying hefty sums for land in the past 11/2 years.

    Buying in the suburbs was strongest last month, accounting for 62 per cent of sales.

    City-fringe units made up 28 per cent, underpinned by CapitaLand's 124-unit project Marine Blue in East Coast Road, where 32 units were sold at a median price of $1,829 psf.

    City-centre homes accounted for 10 per cent.

    While new launches were subdued, demand picked up at some older projects.

    At Roxy-Pacific's 222-unit Trilive in Kovan - the third bestseller - 22 units were sold at a median of $1,562 psf, though it was launched in June last year.

    The developer said in November that it would reduce prices of selected units by about 8 per cent.

    Similarly, MCL Land's 696-unit Lakeville in Jurong - launched in April last year - moved 20 units at a median of $1,378 psf.

    This reflects an underlying demand for residential units, said Mr Desmond Sim, research head at CBRE Southeast Asia. "Buyers now have a wider range of projects to choose from; more sales could be inked if pricing is more competitive," he added.

    If executive condos (EC) are included, 556 units were sold last month.

    The Amore, a Punggol EC by Keong Hong Holdings, Master Contract Services and JBE Holdings, sold 83 units at $795 psf.

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  2. #2
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    http://www.businesstimes.com.sg/real...-more-launches

    Developer sales surge 62% in Jan, thanks to more launches

    But sales figure of 372 units still 35% down y-o-y, and is the lowest for pre-CNY sales since Jan 2009

    By Lee Meixian

    [email protected]@LeeMeixianBT

    17 Feb


    SINGAPORE developers sold 372 private homes in January, a 62 per cent improvement from the 230 units sold in the traditionally lull December period.

    But the increase was largely a function of greater supply, with Marine Blue at Marine Parade and Symphony Suites at Yishun making up the bulk of the launches.

    Last month's sales figure remained a 35 per cent drop from the 572 units moved in January 2014. It also fell far short of the 12-month sales average of 630 units, as cooling measures and loan curbs continue to cap demand.

    In fact, the latest numbers are the lowest pre-Chinese New Year sales since the 108 units sold in January 2009 amid the global financial crisis and recession.

    Of the total of 124 units in Marine Blue, 50 were launched for sale and 32 units were taken up at a median price of S$1,829 psf.

    At Symphony Suites, 180 of its 660 units were launched, and deals were closed for 54 at a median price of S$1,010 psf. This was despite the project being priced at the lower end of market expectations and being touted as the cheapest new condominium on the market currently.

    Including other projects, some 415 units were launched in all, nearly eight times that of the measly 53 units launched in December.

    The latest figures were released on Monday by the Urban Redevelopment Authority, based on monthly submissions of housing sales statistics by developers.

    Ong Teck Hui, national director, research & consultancy, at JLL, said that in a healthy market when buyer interest is strong, it wouldn't matter whether a project is launched close to Chinese New Year.

    "However, in a weak market, launching a new project close to festivities could be more challenging. Buyers who are already affected by poorer sentiments tend to be less interested during such periods."

    Consultants are now expecting a wave of relaunches and some renewed interest from the many units left unsold in prior launches.

    Desmond Sim, head, CBRE Research, Singapore & South East Asia, said: "There is some stirring in the market for projects which have been launched previously, and this is positive for managing the launched and unsold stock.

    "Possibly, it may be due to the preference of some buyers for projects which are nearing completion so that they can occupy the homes they bought within a shorter time frame.

    "This demand for existing projects bodes well for the market as it shows that the underlying demand for residential projects is still fairly strong. The pool of buyers now has a wider range of projects to choose from. More sales could be inked if pricing is more competitive."

    Christine Li, director and head of research at Cushman and Wakefield, added: "Any price cut of more than 10 per cent will excite the market, resulting in better sales in some of the re-launched properties."

    The above figures exclude executive condominiums (ECs), a public-private housing hybrid.

    Including ECs, developers sold 556 units last month, a 37 per cent increase from the 406 units sold in December. Compared to the 620 units sold a year ago, however, this represents a 10 per cent drop.

    The Amore was the only new EC launched in January. It sold 83 of its 378 units at a median price of S$795 psf. Including other previously launched projects, 184 EC units were sold in January.

    Sales at most EC launches in the past few months have been slow.

    "Three of the four ECs launched in November and December 2014 have only managed to achieve take-up rates of 17-30 per cent. This explains why recent tender bids for EC sites have fallen significantly, and also reflects an expectation of EC prices correcting," said JLL's Mr Ong.

    In January, the tender for the EC site at Anchorvale Crescent closed at a top bid of S$280 psf ppr, while in February, a site at Woodlands Avenue 12 received a top bid of S$278 psf ppr.

    R'ST Research director Ong Kah Seng said projects on these two sites may be launched at around S$720 psf. "Clearly, the 'sticky' S$800 psf selling price that developers have been hanging onto cannot be supported," he said.

    According to CBRE, the number of unsold ECs has risen 11 per cent month-on-month to hit 2,251 units in January.

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