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New home sales surge to 11-month high in April

SINGAPORE — Sales of new private homes surged 83 per cent last month to their highest in nearly a year, but analysts said this may not be an indication of a sustained improvement in sentiment as multiple headwinds continue to keep buyers cautious.

A view of private homes in Singapore. TODAY file photo

A view of private homes in Singapore. TODAY file photo

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SINGAPORE — Sales of new private homes surged 83 per cent last month to their highest in nearly a year, but analysts said this may not be an indication of a sustained improvement in sentiment as multiple headwinds continue to keep buyers cautious.

Last month’s transactions punched above the 1,000-level for the first time since last May as 1,124 developer sales were registered, excluding executive condominiums (ECs), up from March’s 613 units and the highest in 11 months, Urban Redevelopment Authority (URA) data showed today (May 15). The surge came as developers launched 1,344 homes, more than three times March’s 400 units, the data showed.

About 66 per cent of April’s sales came from two newly-launched developments last month — North Park Residences in Yishun Central and Botanique at Bartley in Upper Paya Lebar Road — which were the bestselling projects with 486 and 254 units sold, respectively.

Their close proximity to transportation nodes and relatively low price quanta were the main draw for buyers, who are increasingly price-sensitive as interest rates rise and as various cooling measures and loan curbs continued to weigh on sentiment.

“Buyers are more concerned with the total quantum and both projects are priced to what works in today’s market … For North Park Residences, 73 per cent of caveats lodged were for units that were priced below S$1.2 million, while for Botanique at Bartley, it was 84 per cent,” said Mr Eugene Lim, key executive officer of real estate agency ERA.

On a per-square-foot basis, the median transacted price for North Park Residences was S$1,374 while that of Botanique at Bartley was S$1,290 psf.

Mr Nicholas Mak, executive director, research and consultancy at property firm SLP, noted the sizes of transacted units at both projects averaged around 743 to 746 square feet, which is about the area of a two-bedroom apartment. However, North Park Residences was better received due to its positioning as an integrated development.

“One of the key differences between these two projects is that North Park Residences is part of a retail-cum-residential development. This shows that residential projects near MRT stations and shopping malls will still attract more buyers than those that are near MRT stations but do not have any retail amenities nearby,” he said.

The two developments lifted new home sales in the Outside Central Region (OCR), or suburbs, to 975 units last month from 391 homes in March. The Core Central Region (CCR), or city centre, saw an improvement to 36 units sold from 25 in the previous month, while volume in the Rest of Central Region (RCR), or city fringes, slumped to 113 homes from 197 units previously.

While April marked the fourth consecutive month of improvement in new private home sales, analysts said sentiment remains cautious as measures such as the Total Debt Servicing Ratio (TDSR) framework and the Additional Buyer’s Stamp Duty (ABSD) continue to curtail demand.

With half of May having passed, they expect new home sales volume to retreat sharply this month in the absence of large and attractively-priced launches.

Ms Chia Siew Chuin, director of research and advisory at property firm Colliers International, said: “Homebuyers are expected to keep on their toes amid multiple headwinds that have created a mood of tentative sentiment, committing only if they perceive a decent value proposition. Consequently, primary market sales volume is expected to moderate to between 400 and 700 units in May as launches slow down.”

However, the EC market will likely stir, with more new projects hitting the market in the coming months, starting with the launch of Westwood Residences this month. Sales of the hybrid public-private homes are expected to pick up from the 94 units in April, analysts said.

Still, the upside will be limited by property curbs, with Westwood the first EC to be subject to the resale levy that was announced in December 2013.

“The sales of these new EC projects may be weighed down by the upgrader’s resale levy. In view of the significant supply of new ECs, the developers would be closely watching the marketing and sales of next few EC launches in order to strategize the marketing of their own projects,” said Mr Mak.

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