October’s private home sales at five-month high

SINGAPORE — The private housing market continued its slow climb out of the doldrums last month as new home sales hit a five-month high, but analysts warned that the increase does not signal a recovery and that annual sales volume could come in at only about half of last year’s tally.

Developers sold 765 units last month, 18 per cent higher than the 648 deals in September, the Urban Redevelopment Authority (URA) said yesterday. The number of units launched also increased to 649 from September’s 514 homes.

This represents the second consecutive month of increase for new home sales since a lull in August, when home buyers held off buying and developers held back new offerings to avoid the Hungry Ghost Festival.

However, the transaction volume last month is still 31 per cent lower than the 1,104 units sold in October last year, and 40 per cent lower than the average monthly sales of 1,286 units in the past five years.

The improvement in October’s figures was driven primarily by the month’s only new project launch at Marina One Residences — a joint venture development between Temasek Holdings and Malaysia’s sovereign wealth fund Khazanah Nasional — where 334 of the 400 units launched were sold at a median price of S$2,228 per square foot (psf).

“If Marina One Residences was taken out of the equation, the sales volume in October would be the lowest for the whole of 2014 … Therefore, there is still a long way to go for the local real estate market to be on the path of a firm and steady recovery,” said Mr Nicholas Mak, executive director at SLP International Property Consultants.

The project accounted for most of the 381 transactions registered in the city centre, or Core Central Region (CCR). The city fringes, or Rest of Central Region (RCR), saw 123 homes sold, while 261 units in the suburbs, or Outside Central Region (OCR), were snapped up. In terms of launches, CCR welcomed 438 units, while RCR and OCR saw 16 and 195 new offerings, respectively.

“The lack of new launches in October, despite this period being considered as a window of opportunity to secure some sales, shows developers are not confident that there is sufficient demand to achieve a decent take-up,” said Mr Ong Teck Hui, national director for research and consultancy at JLL.

Meanwhile, the executive condominium (EC) segment registered 90 new sales, the highest volume this year, despite there being no new launches last month. Forestville at Woodlands Drive 16 was the best-selling project with 30 units transacted at a median price of S$737 psf.

Analysts said the EC market will drive activity in the next few months as new projects such as Lake Life, Bellewoods and Bellewaters make their appearances in URA data. For private residences, the subdued buying sentiment is expected to continue.

Colliers International’s director of research and advisory Chia Siew Chuin is projecting a total sales tally of 7,500 to 7,900 units for the entire 2014, much lower than the roughly 15,000 deals last year.

“While the improvement in sales over the past two consecutive months indicates that home buyers are still keen on well-located projects despite the prevailing soft market sentiments, home buyers remain highly selective and price-sensitive given the multitude of projects available for their picking,” she said.