Drop in Singapore property sales in line with expectations

Singapore property

Singapore real estate

The latest Urban Redevelopment Authority data for private residential property transactions showed that the monthly sales volume in June slid by 22 per cent month-on-month to 847. This figure was in line with many industry watchers’ expectations, as both developers and buyers held back launches and purchases amidst heightened uncertainty from the Eurozone debt crisis.

Li Hiaw Ho, Executive Director of CB Richard Ellis Research, said: “The momentum of new home sales slowed in June as expected. Developers sold only 847 units, compared to 1,083 units and 2,208 units in May and April respectively. This translates to a total of 4,138 new homes sold in the entire second quarter of 2010, 5.5 per cent fewer than the 4,380 units sold in the previous quarter. In total, 8,518 new homes have been sold in the first six months of the year, averaging 1,420 units per month. In comparison, the average monthly sales volume in 2009 was 1,224 units.”

Dr Chua Yang Liang, Head of Research South East Asia at Jones Lang LaSalle, added: “While transaction volume has declined, prices are likely to hold up. As the previous period of capital appreciation has already over capitalised the market’s worth, we can expect a more moderate buying mood backed by conservative global economic conditions and hence a continual slow down in capital values growth.”

Jones Lang LaSalle noted a total of 429 units, or about 51 per cent of June’s sales volume, were located in Outside Central Region (OCR). The Rest of Central Region (RCR) recorded 275 units sold (32 per cent) while only 123 units (17 per cent) of the units were located in the Core Central Region (CCR).

The Minton at Lorong Ah Soo, a 99-year leasehold condominium which was launched in May, continued to sell well with 173 units sold in June at the median price of S$871 (US$634) per sq ft. This is higher than the median price of S$849 (US$618) per sq ft for first 204 units which were sold in May.

Waterfront Gold at Bedok Reservoir Road was launched in June and 77 units were sold at the median price of S$996 (US$725) per sq ft. This price is about 10 per cent higher than its neighbouring project, Waterfront Keys, attributable to its relatively better view of the Bedok Rservoir.

La Brisa at Lorong 28 Geylang reported 82 sales out of a total of 84 units, at the median price of S$960 (US$698) per sq ft. The strengths of this project lie in its proximity to Aljunied MRT station and affordable price quantum due to the small-format units offered. Most of the units ranged from 409 sq ft to 689 sq ft.

Although the volume of luxury units sold above S$2,500 (US$1,820) per sq ft remained thin, the price points reached in June were higher than those in May. For example, in June, the highest price point of S$4,120 (US$2,999) per sq ft was achieved by a unit in Nassim Park Residences, followed by a unit in Skyline@Orchard Boulevard which was sold at S$3,901 (US$2,829) per sq ft. In May, the highest price point of S$3,641 (US$2,650) per sq ft was achieved by a unit in Orchard View.

The third quarter has started well with the strong sales seen at 368 Thomson and Terrene. Market sentiment could be improving with the latest government’s upward revision of GDP estimates for 2010 to 13 per cent to 15 per cent, from 7 per cent to 9 per cent previously, due to a stronger than expected economic growth in the second quarter. However, buying interest will remain selective, depending on the location and product attributes as well as price points of new launches.

“The private home market is definitely stabilizing,” says PropNex Chief Executive Officer Mohamed Ismail. “The 6,640 units sold in the first four months of 2010 was a figure that was simply not sustainable, and the latest figures equate to a movement towards equilibrium of about 1,000 units on average per month.” Ismail noted that the market stability is also indicated by the fact that the three top-selling projects in June all posted median transaction prices of below S$1,000 (US$728) per sq ft.

“The comparatively brisk sales at the three projects, La Brisa, Waterfront Gold and The Minton, are signs that the consumers are feeling the effects of the rising private property prices and are looking to mass market projects that are more budget-friendly,” said Ismail, referring to URA’s price index flash estimate of 184.1, an all-time record high.

Continuing this trend, he expects an average of about 900 to 1,000 units sold per month for the rest of 2010.

Also looking ahead is Tay Huey Ying, Director for Research and Advisory at Colliers International.

She said: “The end of the World Cup season and June school holiday will likely see buyers returning to the market, and the upgrade of Singapore’s 2010 GDP growth by the MTI yesterday to between 13 per cent and 15 per cent will likely work to boost buyers’ confidence. In addition, the impending lunar seventh month, which will commence some time in the second week of August, could also see superstitious buyers looking to pick up homes in July ahead of the inauspicious home-buying period.”

Copyright © 2020 Asia Property News.