Nov new private home sales figure lowest in 2014, but solid rebound with EC sales

By The Folks @PropTalk - December 15, 2014 No Comments

Developers sold 412 new units (excluding ECs) in November, down from the 785 units sold in October. This is despite an increase in the number of units launched – 859 units compared with the 676 units launched in October. 

The November sales figure for pure private properties is also the lowest for 2014.

Only two new private condominium developments - 493-unit Sophia Hills located at Mount Sophia, and the 250-unit TRE Residences in Geylang - were launched in November. Altogether, the two projects saw just 61 units sold.

Looking ahead, property watchers said developers are unlikely to offer discounts on projects due to the high cost of land they paid for.

"Over the next few months, a lot of the projects that will come on stream would have been derived from Government Land Sales sites in the second half of 2013 and the first half of 2014. On average, although prices would have come off, there are pockets where the GLS sites went to the highest bidder at a relatively high price, which means that developers may not have much room to lower prices," said Mr Alan Cheong, senior director of research and consultancy at Savills Singapore.

But developers may turn to other strategies to keep properties affordable for buyers. Mr Lim Yong Hock, key executive officer of PropNex Realty, said: "One of the ways is to actually trim the sizes of the units, so that the quantum can be much more affordable. Some of the sizes could even range from 300 over square feet upwards. And that could come up to a very affordable pricing of below $500,000."

But there were positive news in the Executive Condominiums (ECs) front, as sales rose sharply in November.

A total of 1,758 ECs were launched last month, with 855 units sold. This marked a significant turnaround from October, when 90 ECs were sold with no new units launched.

EC projects were also best-sellers in November. Topping the list was Lake Life EC in Jurong. Its developer sold 533 of the total 546 units at a median price of $869 psf. Lake Life is the first EC project in Jurong in 17 years.

Buyers also picked up units from other new EC developments. Bellewaters in Punggol saw 170 units sold - at a median price of $813 psf. The same developer cleared 79 units at Bellewoods in Woodlands at a median price of $800 psf.

Property observers said the brisk EC sales are expected due to a pent-up demand in the market following a halt in new launches recently.

Ms Chia Siew Chuin, director of research and advisory at Colliers' International, said: "It is also an indication of buyers' price sensitivity amid a tightened credit environment, as eligible home-buyers deciding between private homes and ECs may go for the latter due to the relatively lower price quantum and housing grants available for the public-private housing hybrid."

As the year draws to a close, observers expect Dec to be a quiet month, due to the year-end festive and holiday period. Overall, property experts say 2014 is likely to end with less than 8,000 units sold - about half the number (14,948) sold in 2013.
Info source: CNA

If Mr Lim @PropNex is right, then one can expect little in terms of price drop for new private homes next year. But as a consolation, one may still be able to afford a new home due to "affordable" quantum by virtue of the fact that developers will continue to build smaller and smaller homes. So what if the per square feet price remains sky-high?

And as long as "there are some who like to slap and others that enjoy being slapped", the property market will continue chugging albeit at a slower pace...

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