Pickup in new private home sales in March

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Pickup in new private home sales in March

Affordability remains a key factor, says one analyst

Published on Apr 16, 2015 1:26 AM

By Rennie Whang


NEW private homes sales picked up last month following a lull over the Christmas and Chinese New Year periods but buyer interest remains patchy.

Developers sold 613 residences last month while 400 units were launched, according to the Urban Redevelopment Authority yesterday. This was a 57.2 per cent jump in sales from February, when 390 units were sold and 389 launched.

Last month's numbers took first-quarter sales to 1,379 units, around the same level recorded in the fourth quarter last year, said JLL national research director Ong Teck Hui. "This indicates a stabilisation of new home sales volume over two quarters. The question of whether volumes have bottomed out will be something to look out for."

Last month's surge could be for seasonal reasons as buyers resumed house-hunting after the Chinese New Year festivities.

Recent increases in key interest rates may have hastened the decision-making process as well, analysts said.

A substantial 43 per cent of new home sales came from two recently launched projects, noted SLP International executive director Nicholas Mak.

Kingsford Waterbay, which was launched last month, led the way with 155 sales at a median price of $1,111 per sq ft (psf). Sims Urban Oasis, which was launched in February, sold 107 units at a median price of $1,401 psf.

While transactions at older launches were more muted, the top 15 best-selling projects all managed double-digit sales, something that has not been seen since October last year, said OrangeTee research manager Wong Xian Yang. Prices did not seem to have been trimmed.

However, market talk is that Sims Urban Oasis developer GuocoLand increased agent sales commissions last month in a bid to move more homes.

"As at the end of last month, 20 per cent of the project's 1,024 units were sold... It is important for the developer to maintain the sales momentum before other new launches start drawing away potential buyers," Mr Mak said.

As in previous months, the suburbs accounted for most of the new private home sales, with 391 units or 63.8 per cent of the total. The city fringes accounted for 32.1 per cent and the central region, just 4.1 per cent.

"Affordability remains a critical factor for buyers, who have been hamstrung by the cooling measures," said JLL's Mr Ong.

Median prices at suburban projects last month were on average 22 per cent below those in the city fringes and 43 per cent lower than in the central region, Mr Ong said. Popular projects in the suburbs included The Skywoods, which sold 27 units at a median price of $1,186 psf, and Symphony Suites, which sold 20 units at a median price of $1,016 psf.

Sales numbers are expected to be up as well this month as developers look to launch projects before the Hungry Ghost Festival in August, said PropNex chief Mohd Ismail Gafoor. Projects launched this month - Botanique and North Park Residences - have seen brisk sales.

But headwinds will persist, including the continued enforcement of cooling measures, a mounting supply of new homes, a weakening leasing market and an impending rise in interest rates, he said.

Private rents posted a 0.4 per cent month-on-month drop last month, or a 6.3 per cent year-on-year fall, according to data from SRX Property yesterday.

Mr Desmond Sim, CBRE research head for Singapore and South-east Asia, noted first-quarter figures point to sales reaching 5,000 to 6,000 units this year.

"These levels are similar to the recession years of 1997 and 1998, or during the Asian financial crisis; 2003 and 2004 during the Sars (severe acute respiratory syndrome) outbreak; and 2008 following the Lehman Brothers collapse."

There is a "strong need for the Government to review the sluice gate of measures" for market volumes to return to the 10,000 to 12,000 yearly average. It could take up to three years to manage the 21,000 unsold units now on the market, he added.

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Developers' March private home sales highest in five months

April numbers will also be buoyed by recent launches, but momentum will hinge on pricing and draw of projects, say analysts

By Kalpana Rashiwala

[email protected]@KalpanaBT

16 Apr


KINGSFORD Waterbay and Sims Urban Oasis helped boost developers' monthly home sales for March 2015. Developers moved a total 613 private homes last month, up 57 per cent from the 390 units in the previous month.

The latest showing, based on Urban Redevelopment Authority data released on Wednesday, also marks a 28 per cent improvement year on year. It was also the best sales result since last October.

Industry players said April's numbers should also be good, on the back of brisk sales so far at North Park Residences in Yishun and Botanique at Bartley. Frasers Centrepoint has sold 413 of the 600 units it has released at the 920-unit North Park Residences, while UOL Group has moved more than 200 units at the 797-unit Botanique at Bartley in Upper Paya Lebar Road.

"There's a definite pick-up in (sales) momentum but whether it can be sustained depends on how attractive the new launches are and their pricing level," said JLL national director Ong Teck Hui.

Ong Choon Fah, chief operating officer at DTZ SE Asia and soon to be its CEO, highlighted that the pick-up in residential property sales is also being felt in the secondary market. "Some owners are feeling the pain from the rise in interest rates. And leasing is also more challenging due to the increase in new home completions. So they are more motivated to sell because they don't see the market turning around in the short term."

URA's numbers released on Wednesday show that Kingsford Waterbay in Upper Serangoon View - the sole new launch in March - recorded sales of 155 units last month at a median price of S$1,111 per square foot.

GuocoLand, which released Sims Urban Oasis in February, found buyers for another 107 units last month at a S$1,401 psf median price.

SLP International executive director Nicholas Mak observed that these two projects accounted for 43 per cent of last month's primary market private home sales (excluding executive condos). While this may be viewed as a lop-sided performance and not reflecting a general recovery in residential sales, OrangeTee's manager, research and consultancy, Xian Yang Wong, highlighted that, for the first time since October last year, the top 15 best-selling projects all managed to achieve double-digit sales figures in March.

URA's data also showed that developers last month sold 79 units in existing executive condo (EC) projects, up slightly from 65 units in February. ECs are a public-private housing hybrid and over the next few months, these projects are expected to take centre-stage for new launches.

Word on the street is that e-applications could begin around mid-May for Westwood Residences in the Jurong West vicinity. The 480-unit project is being developed by Koh Brothers and Heeton Homes.

Several other EC project launches are also expected to be put on the market this year - including City Developments and TID's development along Canberra Drive in the Sembawang area, MCL Land's 1,327-unit Sol Acres along Choa Chu Kang Grove and SingHaiyi and Kay Lim's project in Anchorvale Crescent.

Based on the latest URA numbers, developers have sold 1,379 private homes (excluding ECs) in the first quarter. The final figure will be released later this month. "This is rather similar to the 1,376 private residential units sold by developers in Q4 2014 - indicating a stabilisation of new home sales volumes over two quarters," said JLL's Mr Ong.

Should the quarterly average be annualised, reasoned CBRE Research's Singapore and SE Asia head, Desmond Sim, sales will number about 5,000-6,000 units a year.

PropNex CEO Ismail Gafoor estimates that developers are likely to sell around 9,000 private homes in 2015. "Conservatively, we estimate that about 1,800 EC units will be sold this year, with a good chance it may hit 2,000 units. "We are being conservative because starting with Westwood Residences, HDB upgraders who buy in new EC projects will have to pay a resale levy on the disposal of their HDB flats," said Mr Ismail.

DTZ's Mrs Ong noted that developers still see fairly good demand for residential projects in choice locations such as near MRT stations.

Buyers, however, remain price sensitive - with their budgets crimped by the total debt servicing ratio, the additional buyer's stamp duty and now, more recently the rise in Sibor.

"Developers do try to price their projects attractively - to clear as much of their stock as possible to ease cashflow and in view of the impending competition from rivals who secured land at lower cost in recent months," she said.