July new private home sales highest in 2 years, but...

By The Folks @PropTalk - August 18, 2015 No Comments

Developers' private home sales (excluding executive condominiums) in July quadrupled to 1,594 from just 375 in June. The July figure released by the Urban Redevelopment Authority on Monday (17 August) is the highest monthly figure in about two years but is due largely to just one project.

Chip Eng Seng's sale of 1,169 units of High Park Residences in Fernvale Road accounted for 73% of the volume. The combination of a sub-$1,000psf average pricing (below that for typical suburban projects) and a good proportion of small-format units meant that the vast majority sold were below $1 million, putting them within reach of a wider pool of buyers.

Photo: Fernvale Development

The project's facilities and its location next to Thanggam LRT Station, one stop from The Seletar Mall, also helped with the marketing pitch, along with suggestions that rental demand could come from those working in Seletar Aerospace Park.

However, most market watchers are not expecting July's sales momentum to be sustained. For one, the Hungry Ghosts Month began last Friday.

Desmond Sim, head of Singapore and South-east Asia at CBRE Research, cited two other reasons why August and September would be relatively quiet - the Jubilee celebrations and election fever. "Only a handful of major projects of more than 300 units and a few prime district projects are expected (to be released) for the rest of the year."

However, sales momentum could come from executive condominium (EC) projects - a public-private housing hybrid. This Saturday, sales bookings will begin for MCL Land's Sol Acres in Choa Chu Kang Grove. The average price is $780psf for the 707 units in the initial phase of marketing of the 1,327-unit development. Other EC projects slated for launch include JBE Holdings' 525-unit Signature at Yishun, where e-applications will open on Sept 11, with bookings starting on Sept 26.

Next door, City Developments plans to launch its 505-unit The Criterion in the fourth quarter.

Eugene Lim, key executive officer of ERA Realty, said: "Developers are likely to step up EC launches once the imminent upward revision of income ceiling for EC buyers is confirmed."

In the private housing segment, there has been talk that Keppel Land may release new units at Highline Residences, near Tiong Bahru MRT Station - later this month or next month.

In October, UOL and Kheng Leong are expected to release their 663-unit Principal Garden condo along Prince Charles Crescent.

"Generally," said a seasoned developer, "developers are expected to price their projects reasonably to draw buyers - given the uncertainties that continue to weigh on the market including interest rate increases, exchange rate woes and stock market volatility as well as the looming high volumes of private housing completions."

In the luxury condo segment, Wing Tai in July sold a fifth floor unit at its freehold Le Nouvel Ardmore condo for $15.84 million or S$4,000 psf - the highest psf price for a non-landed private home so far this year.

The July private home volume marked a big jump from the 511 units a year ago and was the highest since June 2013, when 1,806 units were sold.

"But the high sales volume achieved in June 2013," pointed out SLP International executive director Nicholas Mak, "was before the TDSR (total debt servicing ratio) framework adversely affected buying demand."

As in the past, the strong pick-up in July sales was in tandem with an increase in units launched.

In the EC segment, developers found buyers for 495 units in July, up from 110 in June and 51 units a year ago. July's top-selling EC development was City Developments' The Brownstone in Canberra Drive, with 187 units sold at a median price of $818psf, followed by Singhaiyi Group and Kay Lim Investment's The Vales in Anchorvale Crescent (79 units sold at $788 psf median price). Both were launched last month.

In the first seven months, 5,021 private homes and 1,260 ECs were sold in the primary market. For the whole of 2014, the figures were 7,316 and 1,578 respectively.

Chua Yang Liang, JLL head of research for Singapore and South-east Asia, is sticking to his forecast that developers will sell 6,500-7,500 private homes this year. PropNex Realty CEO Ismail Gafoor expects some 8,000-9,000 to be sold.

As for ECs, Mr Lim of ERA reckons around 2,000 units could be sold.

Mr Ismail said that while selected projects that are reasonably priced and well located will continue to attract buyers, prices are expected to come under some pressure as the potential pool of buyers shrinks and developers face stronger competition.

As for the hope that cooling measures may be lifted soon, National Development Minister Khaw Boon Wan has quashed such talk. He told Today that while the property market was "a lot less hot", it has not reached a point where an adjustment, or even a lifting, of those measures is warranted.

"The right time is when the equilibrium is a lot more certain, more sustainable," he said. "And I don't think we are at that point yet."
Source: BT

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