Sunday, April 25, 2010

Home sales will continue to sizzle

Economic recovery and better job prospects will sustain demand: Experts

With first-quarter home sales rocketing to a higher-than-expected 4,446 units, property experts say that the strong sales momentum will probably spill over into the second quarter as developers plan more sizeable launches.

In fact, at least 12 developments have been identified by property consultants as possible launches this quarter.

These include Far East Organization's 361-unit Waterfront Gold at Bedok Reservoir Road, Wing Tai Holdings' 43-unit Le Nouvel Ardmore at Ardmore Park and KSH Holdings' 250-unit Cityscape@Farrer Park.

The strong economic recovery and better employment prospects will continue to sustain demand, Knight Frank manager of consultancy and research Ong Kah Seng said.

This is especially so after the latest government announcement of stellar first-quarter 13.1 per cent growth for the economy year-on-year and its upward revision of full-year gross domestic product growth to 7 per cent to 9 per cent from the previous 4.5 per cent to 6.5 per cent, further contributing to positive market sentiments.

CB Richard Ellis (CBRE) residential executive director Joseph Tan added that with the coming months seeing more sizeable project launches in varying locations, there will be enough choices to continue drawing the interest of potential buyers.

Sales in the first quarter were dominated by units in the core central region, where prime and higher-end properties such as those in Cairnhill and Holland Road, or Sentosa, are located. They made up 44 per cent of total sales, according to CBRE.

The second quarter is also likely to see similar posh launches following a laggard performance of high-end residential properties in the past two years, experts say.

'The launch and sales activity outside the central region (OCR) was buoyant in 2009 and a number of mass-market projects were launched last year. Hence fewer sites will be launched in the OCR area,' Mr Ong said.

However, buyers can still expect to see mid-tier and mass-market launches this quarter, such as The Minton in Hougang Street 11 and UOL Group's Terrene condominium.

CBRE's Mr Tan noted that more than 500 units of UOL Group's 616-unit Waterbank at Dakota had been sold in the two weeks since its preview early this month.

Ms Christine Sun, Savills Singapore's senior manager of research and consultancy, pointed out that buying interest had remained strong despite recent anti-speculation measures.

'The residential market is likely to perform as well moving forward, especially over the next few months as developers push out new launches to ride on the current sentiment and buyers race to lock in the lower borrowing rates ahead of the expected interest rate revision by the second half of this year,' she added.

Home sales of 4,446 units in the first quarter were more than double the 1,860 units sold in the previous quarter and 67 per cent more than sales in the same period last year.

If the pace continues throughout the year, total sales of new homes could be comparable to last year's volume of 14,688 units, property experts say.

Home hunters, however, will be pleased to note that with the Government's close monitoring, most experts do not expect prices to spiral upwards rapidly.

Although Knight Frank's Mr Ong expects to see high-end residential properties receiving strong buying interest and enjoying a higher price increase, any rise is likely to be 'incremental and sustainable'.

He said: 'The overall interest for high-end residential properties will be underpinned by sound economic fundamentals and buyers who carefully evaluated the investment potential of high-end residential properties.

'The integrated resorts can enhance the international exposure and familiarity of Singapore, and provide further opportunities for owners and sellers of high-end residential properties.'

Savills' Ms Sun said prices are likely to see moderate rises only.

She expects a 10 per cent to 15 per cent increase in the high-end market and a 5 per cent to 10 per cent increase in prices for the mid-tier and mass markets after their strong run last year.

Source: Sunday Times, 25 Apr 2010

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