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Thread: Prices inch up as home sales hit new highs

  1. #1
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    Default Prices inch up as home sales hit new highs,00.html?

    Published August 18, 2009

    Prices inch up as home sales hit new highs

    Record 2009 sales on the cards as developers seek balance between volume and price


    (SINGAPORE) Even as news of the 52 per cent month-on-month jump in developer home sales to a stunning 2,767 units in July begins to sink in, analysts are revising their predictions for the full year.

    The 1,825 units sold in June already constituted a record but that number was surpassed effortlessly last month as buyers, eager not to miss the boat, rushed in and developers rolled out tempting new offerings. They launched 2,878 private homes in July, up 75.8 per cent from the June figure. For a year that started gloomily, 2009 may shatter private home sales records.

    From Jan 1 to July 31 this year, developers sold 10,017 private homes. The previous full-year record of 14,811 units set in 2007 is likely to be overtaken with some market watchers forecasting sales of up to 16,000 units for the full year 2009.

    But it will be a toss-up between developers wanting stronger price appreciation and booking more sales, some property pundits say. Evidence of price increases at some projects has surfaced from a Colliers International analysis of the Urban Redevelopment Authority's data on developer sales in July. Examples include Martin Place Residences, The Beverly at Toh Tuck Road, Concourse Skyline at Beach Road and Floridian in Bukit Timah.

    In part, the higher prices can be explained by more transactions involving units on higher floors or with better orientation in July, compared to June. But developers have also become more confident about seeking higher prices as they've sold more units in ongoing projects. Also, new projects released in recent weeks have been priced higher than levels prevailing, say, in Q1 this year.

    Frasers Centrepoint chief operating officer Cheang Kok Kheong says: 'The price increase varies from segment to segment and from project to project. For the mass market, my gut feel is the increase has been about 10-15 per cent from the lows of January-February 2009.'

    Knight Frank executive director Peter Ow says: 'Buyers are price sensitive at this juncture. There's a limit to how quickly developers can raise their prices. The jump in sales in July was driven by launches at prices that are still reasonable despite the fact that they are higher than Q1 launch prices.

    'When they see developers selling well at launches, it increases the fear factor in people who have not bought or invested yet - that they will miss the boat.'

    Mr Cheang says his gut feel is that developers may sell a total of 15,000 to 16,000 units for the whole year.

    Nicholas Mak, a property consultant, is gazing at the same sort of numbers, citing continuing optimism among buyers that the worst is over for Singapore's property market.

    CB Richard Ellis executive director Li Hiaw Ho reckons that there's a good chance of surpassing the market peak of 14,811 units in 2007.

    Apart from pricing, how many homes developers sell for the rest of this year will also depend on the type of projects they release.

    According to the URA figures, the strong sales in July was led by the Outside Central Region (OCR) - where mass-market homes are typically located. It accounted for about 64 per cent of the 2,878 private homes that developers launched and 54 per cent or 1,502 of the 2,767 units sold.

    The main projects that contributed to the high July sales in OCR included The Gale (294 units sold), Meadows @ Peirce (286 units), Watefront Key (191 units) and Optima @ Tanah Merah (132 units).

    After the strong spate of sales, developers are left with fewer 99-year leasehold mass-market projects that buyers have hungered for this year. One of them, NTUC Choice Homes' Trevista in Toa Payoh, goes on the market next week. There are also condos in Yishun and the West Coast bought on land at state tenders, which could be put on the market before year-end. In the mid-market segment, CapitaLand's condo of about 1,000 units on the Gillman Heights site is also expected to be launched in the current half.

    In Q2, the Rest of Central Region accounted for 751 or 27.1 per cent of primary market sales; top contributors included Parc Imperial (137 units) and Ascentia Sky (116 units). The Core Central Region had the smallest share of 18.6 per cent or 514 units. The star performers in this segment were Sophia Residences and Volari, with sales of 173 units and 79 units respectively in July.

    Whereas home sales more than trebled in OCR from 432 units in June to 1,502 units in July, sales eased in both CCR and RCR over the same period.

    Units costing up to $1,000 psf accounted for 57.5 per cent of developers' July sales, not far off a 59.8 per cent share in June, according to Colliers' analysis.

    Still, Colliers International director for research and consultancy Tay Huey Ying points out that positive sentiment and improved confidence continue to spill into the higher market segments as seen in the surge in units priced above $2,000 psf that developers sold - from 37 units in June to 98 in July. The latest figure was boosted by the sale of 58 units in this price range at Volari at Balmoral Road.

    However, there was no unit priced above $3,500 psf that changed hands in July, unlike June, when there was one.

  2. #2
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    Default July sales of new private homes at all-time high

    August 18, 2009 Tuesday

    July sales of new private homes at all-time high

    A total of 2,767 units sold, with just over half in suburban areas

    By Joyce Teo

    PRIVATE home sales rocketed to a record in July as buyers defied the economic downturn to propel the property market into unprecedented territory.

    Prices are also on the same track with values rising amid the rush to seal deals.

    Developers sold a whopping 2,767 units of new private homes last month. This easily beat the 1,825 units sold in June, itself a number that had never been reached in the 2007 boom.

    The numbers 'almost defy belief', said PropNex chief executive Mohamed Ismail, who described the recovery as nothing short of amazing.

    The buying splurge brought new home sales in the first seven months of the year to 10,017 units. This is only about 10 per cent below the full-year level in 2006 when the market was on its way up. It is also well up on the 4,264 homes sold in all of last year.

    Developers are cashing in on the heightened interest. They launched 2,878 units in July, up from 1,637 in June, according to Urban Redevelopment Authority data yesterday.

    Just over half the units sold last month - including the top three sellers - were in suburban areas, which attract largely locals.

    Buyers snapped up 294 flats at The Gale in Flora Road at a median price of $696 per sq ft (psf). In Upper Thomson, Meadows @ Peirce launched 400 units in July and sold 286 at a median level of $919 psf.

    Waterfront Key in Bedok Reservoir Road launched 310 units and sold 191 at a median price of $734 psf.

    Projects such as Centro Residences and Ascentia Sky were sold at prices that have not been seen before in their areas.

    There was also some interest in high-end homes - Sophia Residence in Sophia Road and Volari in Balmoral Road did well. The highest price done was at Nassim Park Residences, where four units sold for a median price of $3,273 psf.

    'With signs of the economy improving, home buyers are taking advantage of the opportunity to make their purchases,' said CBRE Research executive director Li Hiaw Ho. 'Investors have also turned to focus on property after having lost faith in financial structured products.'

    Other consultants pointed to a positive stock market performance in July, increased supply, pent-up demand, as well as the affordable total quantum for smaller sized units.

    They now say there is a good chance of this year's sales surpassing the 2007 record of 14,811 units, though they do not see a repeat of July sales.

    More are also sounding a note of caution over the price run-up.

    While Mr Ismail believes this year's sales will reach a record level, he said developers should not get carried away by the surge in demand. Marking prices higher would be 'akin to throwing cold water on a fire', he said.

    Barring any unexpected shocks to the market, prices are likely to hit a plateau soon as they have risen too much too fast, said property expert Nicholas Mak.

    He said sales could reach up to 16,000 units this year, with as much as 40 per cent coming from suburban areas.

    CBRE Research said a few 99-year projects such as Trevista in Toa Payoh, a project in West Coast Crescent and another in Yishun Avenue 1 are expected this year. Trevista is already said to have attracted a long list of potential buyers.

    However, Jones Lang LaSalle's head of research, South-east Asia, Dr Chua Yang Liang, warned that in terms of overall islandwide demand, the take-up rate in July has slipped slightly compared with the previous months.

    'This suggests that developers might have been too zealous with the overall supply when demand still remains fragile.

    'Unless we begin to record positive growth in the larger global and domestic economies, the recent spike in demand and prices, if prolonged, may cause asset-driven inflation in the longer term, if wage increases do not keep in pace.'

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    Private home sales up 52%

    by Ng Baoying [email protected]

    05:55 AM Aug 18, 2009

    SALES of private homes hit a new high for the second straight month in July, surging about 52 per cent from June.

    Low interest rates, relatively lower prices and a fear of missing the bottom are some reasons behind the strong sales. Although there were also signs of speculation, a significant portion of the sales was backed by real demand, said analysts.

    According to the Urban Redevelopment Authority, 2,767 units were sold last month, compared to 1,825 in June. The total number of private homes sold in the first seven months of the year hit 10,017 units.

    Property consulting firm Cushman and Wakefield director Donald Han said: "With another five more months to go, (sales could) potentially cross the 15,000 mark. It might go as high to 16,000 to 18,000; it will definitely be one of the records being set."

    Out of the total number of units sold last month, more than half were in the suburban areas, about 27 per cent of the transactions were in the city fringe areas, while 18.6 per cent were in prime districts.

    The five best selling developments last month were The Gale near Changi airport, [email protected] at Upper Thomson Road, Waterfront Key along Bedok Reservoir Road, Sophia Residences near Dhoby Ghaut and Parc Imperial at Pasir Panjang.

    Analysts say July's sales numbers will be unmatched in August, due to the Hungry Ghost Month (Aug 20), which is a traditionally slow period for sales. Less than 1,400 units are expected to be sold then.

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