Tuesday, April 20, 2010

Slower April sales not stopping launches

Tree House, The Holland Collection being launched this weekend

Developers plan to launch more residential projects this weekend – even though home sales slowed in April after a strong showing in March.

1,761 new private homes were sold in March – a 47 per cent month-on-month increase. But sales have come off this month, market watchers say – though there have been exceptions.

UOL Group said that it sold more than 130 units in its 616-unit Waterbank at Dakota condominium from Friday to Sunday. This takes the number of apartments sold there to more than 500. Apartments went for $1,000-1,300 per sq ft and UOL said that it will release more this weekend.

Would-be buyers can also look forward to two projects that will be launched for the first time this weekend – City Developments’ Tree House and The Holland Collection from Lippo Group and CLSA Capital Partners.

The Holland Collection’s 26 high-end luxury homes are being built on the site of the former Aura Park condominium in Holland Road. Lippo bought the site in a collective sale deal in June 2007 for $1,280 psf of potential gross floor area – a high for the location. CLSA Capital Partners took a 50 per cent stake in the project a few months later.

CLSA Capital Partners’ development director Peter Tham said that the partners wanted to launch the project in 2008 but decided to hold back until market sentiment improved.

‘The market took a turn for the worse and we might not have achieved our break-even price,’ said Mr Tham. ‘But we took advantage of the decline in construction costs and started building in September last year.’

The Holland Collection’s 26 units will have 19 unique variations in layout, size and space configurations. Apartment sizes range from 1,281 sq ft to 3,606 sq ft. Units will be launched this weekend at an average price of $2,000 psf.

Elsewhere, City Developments will launch its 429-unit Tree House on Chestnut Avenue. Prices start from around $600,000 for a 721 sq ft two-bedroom apartment, agents say.

Analysts have warned that government policy risk could come back into focus following March’s strong sales.

‘We believe that policy risk still exists,’ said DBS Group Research analyst Adrian Chua. ‘Back in January, strong monthly sales of around 1,480 units triggered a second wave of government measures.’

Deutsche Bank likewise raised a red flag last week. The bank’s analysts believe possible measures the government could use to cool the market include increasing the supply of land, lowering the loan-to-value limit for second home purchases and a capital gains tax.

Despite this, analysts believe that home sales are likely to stay healthy for the rest of the year amid Singapore’s economic recovery.

Mr Chua has raised his 2010 forecast for private home sales to 10,000-12,000 units, from 8,000-10,000 units, following strong Q1 2010 numbers.

Source: Business Times, 20 Apr 2010

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