March new home sales highest in 5 months!

By The Folks @PropTalk - April 16, 2015 No Comments
New private home sales jumped in March, with developers selling almost 60% more units compared to the previous month. But as cooling measures are still in place, property watchers Channel NewsAsia spoke to said it remains to be seen if the uptick represents a recovery in the market.

Developers sold 613 new homes in March, excluding executive condominiums. This was a sharp increase from the numbers sold in the previous two months, when 390 and 376 homes were sold respectively, although there were about the same number of new units launched - about 400 units each.

In keeping with previous monthly trends, new private homes in the suburban area remained the most popular with buyers, taking 63.8% of total sales in March.

This was followed by the city fringe area, at 32.1%, and the city area at 4.1%.
Jones Lang LaSalle’s national director of research Mr Ong Teck Hui said affordability remains a “critical factor” for buyers who have been constrained by the cooling measures, including the Total Debt Servicing Ratio.

"Outside Central Region units remain significantly more affordable as their project median prices in March are on average 22% below those of Rest of Central Region and 43% lower than Core Central Region’s," said Mr Ong.
Property watchers said it is more than the pricing that drove sales in March. According to property firm CBRE, potential buyers could have been pressured to seal that purchase by the recent rise in interest rates.

Said Mr Desmond Sim, head of research, Singapore at CBRE Research: "That has probably caused the decision-making process to be shorter because (buyers) want to come in, and step into the rates that are on offer before they rise even higher."

The top-selling project in March was the newly-launched Kingsford Waterbay. The development sold 155 units at a median price of $1,111psf. Sims Urban Oasis, located at Sims Drive, was the second-best seller. The project, which was launched in February, cleared another 107 units at a median price of $1,401psf in March.

Other projects such as City Gate and The Skywoods, which were launched even earlier, also moved 28 and 27 units each.

Despite the spike in transactions in March, overall sales for the first quarter fell short when compared to the same period in previous years.

In total, developers sold 1,379 units in the three months ended in March this year. This was lower than the 1,791 units sold in the same period in 2014, and a sharp drop from the 5,533 units in the first quarter of 2013.

Analysts said the weak sales momentum is expected to persist, with property cooling measures and mortgage-tightening rules still in place. But they also said that sales may see a slight uptick, as there could be more attractively-priced projects in the later half of this year.

Said Mr Alan Cheong, senior director of research at Savills Singapore: "Because of some of these Government land sales tenders that closed late last year, the land price on per square foot basis per plot ratio is pretty reasonable. So the developers have the luxury to price it attractively to clear the first launch."

In the near term, analysts said April looks set to be a good month. Already, North Park Residences, which opened for sale last week, has sold 413 units.
Source: CNA

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