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Thread: Banner Q1 on the cards as new homes keep on selling

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    Default Banner Q1 on the cards as new homes keep on selling,00.html?

    Published March 16, 2010

    Banner Q1 on the cards as new homes keep on selling

    Strong momentum continued through February and more launches are expected this month


    (SINGAPORE) The number of new private homes sold in January and February 2010 has already outstripped that for the whole of Q1 2009, official data shows.

    Developers sold 1,196 units in February - down 19 per cent month-on- month from the 1,480 units sold in January 2010 - according to the Urban Redevelopment Authority (URA). Analysts attributed the slowdown to the Chinese New Year.

    But sales over the two months still work out to 2,676 units - slightly more than the 2,552 homes sold in Q1 2009 and a significant jump from the 1,841 homes sold in Q4 2009.

    The number of units launched also hit 2,587 in January and February, which has also exceeded the levels seen in Q1 2009 and Q4 2009.

    Analysts predict that another more than 1,000 new homes could be sold in March - which means that the take-up for Q1 2010 is likely to top 3,600 units.

    'As the strong sales momentum in January and February continues into March, new home sales in the first quarter of 2010 could reach 4,000 units. Especially with two more new launches at Sentosa Cove expected in March,' said Li Hiaw Ho, executive director of CBRE Research.

    DTZ expects the take-up in Q1 2010 to be between 3,400 and 3,800 units, while Jones Lang LaSalle's (JLL) estimate is for 3,500 units.

    Sales in March are expected to hold up in spite of the introduction of two new policies to curb speculation in the private residential market introduced by the government in late February - a seller's stamp duty for those who buy a residential property and sell it within a year and a reduction in the loan-to-value limit on housing loans from 90 per cent to 80 per cent.

    'Interest in properties has yet to wane, as judged by strong showflat turnouts,' observed DMG & Partners analyst Brandon Lee, who visited the showflats of Cheung Kong Holdings' The Vision and Sing Holdings' The Laurels over the weekend.

    'Buyers were undeterred despite the recent slew of government policies, as evidenced by healthy take-ups of 60-80 per cent and the 20-30 per cent price premiums achieved over nearby completed projects.'

    Sing Holdings said yesterday that it has sold 133 of the 179 units released at the 229-unit The Laurels in the Cairnhill area as of Sunday. All four penthouses and one-bedroom units have been taken up, and the price for 'typical units' ranges from $2,800-$3,200 psf.

    In a separate update, Cheung Kong Holdings said that 160 apartments in the 295-unit The Vision were sold by end-Sunday. Two to four-bedroom units went for around $1,000-$1,200 psf.

    Encouraged by the strong take-up in the first two months of the year, developers are expected to launch more units and projects in what is left of March.

    'With the government monitoring the market closely, it would also be in the interest of developers to proceed with their launches instead of at a later date when prices may come under pressure if more market cooling measures were introduced,' said Tay Huey Ying, Colliers' director for research and advisory.

    In particular, City Developments' 228-unit The Residences at W Singapore and Ho Bee Investment's 151-unit Seascape (both on Sentosa Cove) are highly anticipated.

    Some developers are rolling out more units in already-launched projects.

    Hong Fok Land is understood to have launched the second phase of units at the 360-unit Concourse Skyline on Beach Road. A total of 171-units (out of 200 launched) were sold as at end-February, with two units transacting during the month at a median price of $1,818. However units in the second phase, which come with a water-view, are going for more than $2,000 psf each, sources said. The developer is also absorbing the stamp duty on selected units to a bid to boost sales.

    In February, there was also a preference for cheaper units. According to Colliers, only 643 properties, or 54 per cent of the total number of homes sold, went for more than $1,000 per square foot (psf) in February. This contrasts with the 1,118 units sold in the same category in January, which accounted for 76 per cent of all sales during that month.

    'The impact of the (new government) measures was probably marginal during the month given that the policies only took effect on February 20,' said Chua Yang Liang, JLL's head of research for South-east Asia and Singapore.

    But he cautioned that the take-up rate (the number of units sold divided by the number of units launched) could be hit somewhat over the rest of 2010.

    The star performer in February was MCL Land's The Estuary, a mass-market project in Yishun which was launched after the government measures were announced. The 386 units sold (at a median price of $757 psf) from this project alone accounted for nearly one-third of the sales in February. In second place was Far East Organization's Altez in Enggor Street with a take-up of 150 units and a median price of $1,817 psf.

    But interest remained for luxury projects. Seven units above $3,000 psf were sold in February, compared to only one in January. These included four units from UOL Group's Nassim Park Residences at a median price of $3,202 psf. Analysts noted that the URA price index is likely to register an increase in Q1 based on the higher-value projects sold in the quarter.

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    Mar 16, 2010

    Strong new home sales in Feb despite CNY, cooling measures

    By Joyce Teo

    PROPERTY buyers showed few signs of easing off last month and snapped up 1,196 new private homes - more than industry experts had expected for a month many thought would be quieter.

    The robust figures follow from a bumper January, when 1,480 private units were sold - a number that trumped the miserly 481 shifted in December, and helped prompt government measures to pre-empt a property bubble.

    Sales in January and February hit 2,676 units, already well up on the 2,596 sold in the first three months of last year, with March numbers yet to come.

    CBRE Research executive director Li Hiaw Ho said yesterday: 'As the strong sales momentum in January-February continues into March, new home sales in the first quarter of 2010 could reach 4,000 units.'

    Already, Cheung Kong (Holdings) at the weekend sold 160 units of The Vision in the west coast at $1,000 to $1,200 per sq ft.

    Last month's sales serve to underline that the property resurgence is more resilient than some had thought.

    PropNex chief executive Mohamed Ismail said the figures were 'impressive' considering the Chinese New Year holiday typically marks a quieter month. February is also the shortest month, and market cooling measures took effect on the 20th of the month.

    The strong performance is 'testament to the underlying strength of demand for homes by both owner-occupiers and investors', said Colliers International's director for research and advisory, Ms Tay Huey Ying.

    'Purchasers appear to be largely unfazed by any short-term corrections the market may see due to potential future government measures as they are confident of their ability to ride through it to benefit from price appreciation,' she said.

    Developers launched 1,161 units last month compared with 1,426 in January, according to Urban Redevelopment Authority data out yesterday.

    The bulk of last month's sales were for projects located in prime or suburban districts.

    Suburban home sales totalled 563 units, up 32 per cent from January.

    One project - The Estuary in Yishun - contributed to most of that number, with 386 units selling at a median price of $757 psf.

    CBRE Research said the condo's strong showing could be because it was the only new mass-market type project launched in the Yishun area in several years.

    Altez in Tanjong Pagar and Waterscape at Cavenagh also did well, selling mostly one- and two-bedroom units, it said.

    Overall, sales of city-fringe and prime projects dipped last month, although seven units priced above $3,000 psf were sold, up from one in January.

    Four units at Nassim Park Residences went at a median price of $3,202 psf, two at Orchard Residences sold at a median price of $3,547 psf and one at Seven Palms in Sentosa Cove attracted $3,318 psf.

    'February sales have come down a little, but it is still high. Still, further measures won't be likely unless prices continue to rise unabated,' said Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang.

    If that happens, a fine-tuning of the current cooling measures and possibly the introduction of a capital gains tax may be possible, he said.

    While the seller's stamp duty introduced last month could reduce new sales by another 5 per cent to 10 per cent this month, its impact is likely to be on speculators in the sub-sales and resale market, said Dr Chua.

    Experts expect sales and launches to stay above the 1,000-unit mark this month.

    'Home prices are likely to register an increase based on the higher-value projects sold in the quarter,' said CBRE's Mr Li.

    Colliers International's Ms Tay said: 'Buyers are likely to continue to lock in their purchases for fear of being priced out of the market if prices continue to climb.'

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