Saturday, August 1, 2009

Pricier units making up bigger share of home sales

Proportion of private homes sold at over $1.5m rise by six percentage points in 2 months

REFLECTING larger buying appetites and more mid- to high-end launches in the market, the proportion of private homes sold at over $1.5 million has risen by six percentage points in two months.

Analysing 10,583 caveats captured by the Urban Redevelopment Authority's (URA) Realis system from January to June, property consultancy DTZ found that 18 per cent lodged were for apartments in this price range.

From January to April, private homes costing more than $1.5 million accounted for a smaller 12 per cent of the 4,401 caveats lodged. There has been a 'spillover of buying momentum from the mass market to the mid and upper-tiers', said DTZ head of South-east Asia research Chua Chor Hoon.

Chesterton Suntec International head of research and consultancy Colin Tan also said that more centrally located properties were introduced. 'By virtue of the location, prices will go up.'

According to earlier data from URA, 72 per cent of the 1,637 units launched by developers in June were from the core central region and rest of central region. This proportion exceeded that in April, which was 59 per cent.

In June, for instance, Allgreen Properties launched the freehold One Devonshire near Killiney Road. A caveat was lodged for a unit costing $2.02 million or $1,690 per square foot. Sim Lian also launched Rochelle at Newton in May. Several caveats were lodged for units above $1.5 million, with one going for $1.83 million or $983 psf.

More buyers also went for luxury projects already in the market in May and June. A unit at The Oceanfront @ Sentosa Cove changed hands at $11.5 million or $1,922 psf. Seven units at Ardmore Park were also sold at $6 million or more each, with the highest at $7.25 million or $2,513 psf.

As pricier properties took up a greater share of transactions, the most affordable ones occupied a smaller share. Units going for $600,000 or less accounted for 13 per cent of caveats in January to June, down from 19 per cent in January to April.

Homes at $600,000-plus to $800,000 retained their popularity with most buyers. The bulk - or 30 per cent - of caveats lodged from January to June was for apartments in this price range.

Recent launches, such as Frasers Centrepoint's fully sold 8@Woodleigh and Chip Eng Seng's Oasis@Elias largely catered to this market segment.

With affordability still on the back of most buyers' minds, resistance continued to hover at the $1.5 million level. Units going for less than this price accounted for 82 per cent of all caveats lodged. 'Most of the units sold are small and in the affordable range as they cater to HDB upgraders and local investors, where most of the demand is coming from,' said Ms Chua.

The launch momentum appears to be going strong, even as the government cautioned buyers against over-committing in property on Wednesday. Agents are ascertaining interest for several projects, such as the freehold 235-unit Viva in Novena and NTUC Choice Homes' condominium in Toa Payoh.

Over at Optima, a new launch in Tanah Merah, another 156 units were allocated through balloting yesterday evening.

Source: Business Times, 1 Aug 2009

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