Strong momentum continued through February and more launches are expected this month
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.
Source: Business Times, 16 Mar 2010