Tuesday, June 16, 2009

A merry May for home sales

Figure at near record level, with prime areas doing particularly well

SALES of new private homes rocketed last month, thanks to price cuts and the share market rally boosting buyer confidence.

Recession-defying numbers out yesterday showed there were 1,668 units sold in May, just a tad below the all-time high of 1,731 set in the boom-time month of August 2007.

Last month's figure was also well ahead of the already-strong developer sales of 1,214 units in April and 1,220 in March.

PropNex chief executive Mohamed Ismail cited recent rallying of the stock markets and launches by developers at attractive prices as reasons for what he described as outstanding sales last month.

Many speculators who had been sitting on the fence were spurred into action, hoping to take advantage of the low prices in the market across all levels, he said.

Other experts cited pent-up demand and buyers' fear of missing the boat as explanations for the sales spike.

Developers stepped up a gear last month as well, launching 1,161 new homes, up from 1,085 in April, according to Urban Redevelopment Authority data.

The total sales of 2,882 units recorded in April and last month exceeded first-quarter sales by 11 per cent and they were generally done at prices higher than the first quarter's, said CBRE Research.

One striking aspect of last month's bumper numbers is that sales of homes in the core central or prime region nearly doubled from April to 617 units. This comprised 37 per cent of total sales.

Despite being in the midst of an economic downturn, this region's May sales have outshone the August 2007 performance by 6 per cent, said Jones Lang LaSalle's associate director of research, Mr Desmond Sim.

The high-end segment, while still mired in the doldrums, recorded 15 transactions, up from three in April, noted PropNex. Two units at The Orchard Residences atop the Orchard MRT station, for instance, were sold at $2,787 per sq ft (psf) and $3,299 psf - prices that have not been seen for a while.

Sales were also well up in city-fringe areas. There, 609 units transacted at median prices of $735 psf to $1,200 psf over April's 362 units.

But sales of suburban homes reflecting a median price range of $580 psf to $760 psf fell 16 per cent to 442 units.

The best-selling project last month was the 302-unit Martin Place Residences in Kim Yam Road, which had sales of 186 units at a median price of $1,423 psf.

Buyers flocked there after Frasers Centrepoint cut prices to a seemingly attractive level - initial units at the condo had gone for $1,700 to $2,000 psf last year.

Other popular projects included The Wharf Residence in Tong Watt Road and The Arte in Jalan Datoh. Buyers picked up 140 units at The Wharf Residence at a median price of $1,186 psf and units of The Arte at $933 psf.

Experts said the unexpectedly strong May showing was rather exceptional.

Mr Ismail said the number of transactions this month could well exceed 1,000 units while CBRE Research expects second-quarter sales to exceed 3,500 units.

If the present strong sentiment persists, this year's new home sales will exceed 10,000 units, which is way above the 4,264 units sold last year and close to the 11,147 units sold in 2006, it said.

Source: Straits Times, 16 June 2009

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