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New private home sales nearly double on launches, price cuts

SINGAPORE — The private housing sector sprang into life in May after months of lacklustre activity, with primary sales surging 96 per cent to their highest in almost a year after developers put more new homes on the market and cut prices.

Bishan’s Sky Habitat, which was priced at S$1,583 psf at the initial launch in April 2012, saw 15 units being sold at a median price of S$1,336 psf 
last month. 
Today File Photo

Bishan’s Sky Habitat, which was priced at S$1,583 psf at the initial launch in April 2012, saw 15 units being sold at a median price of S$1,336 psf
last month.
Today File Photo

SINGAPORE — The private housing sector sprang into life in May after months of lacklustre activity, with primary sales surging 96 per cent to their highest in almost a year after developers put more new homes on the market and cut prices.

But while the improvement was encouraging for a market that has languished in the doldrums after being hit by a slew of government measures and loan curbs, analysts said buying sentiment was still cautious.

Last month, developers sold 1,470 new private homes, nearly doubling the 749 units they moved in April. It was the highest number seen since the introduction of the Total Debt Servicing Ratio (TDSR) framework in June last year, data from the Urban Redevelopment Authority (URA) showed yesterday.

The higher sales volume came as developers launched 1,790 new homes in May, nearly three times that of the 600 units in the previous month.

Mr Nicholas Mak, executive director of research and consultancy at SLP International, said: “I would say there is pent-up supply in the market because developers have been waiting for the right time to launch their projects. And after waiting from December last year till April, some of them launched in May.

“Even though the launch volume in May was three times that of April, the sales volume only increased by two times. This means that the market is still quite soft and buyers are still price-sensitive, because the projects that have sold well are perceived by the buyers as attractively-priced,” he added.

Two projects co-developed by City Developments topped the bestselling list for the month: Coco Palms at Pasir Ris Grove saw 590 units sold at a median price of S$1,018 per square foot (psf) out of the 600 launched. Over at Commonwealth Avenue, 275 homes were sold in Commonwealth Towers at a median price of S$1,626 psf out of the 400 that were launched.

These two developments helped boost activity in the Outside Central Region and the Rest of Central Region. The former saw a 92 per cent pick-up in sales to 944 units, while volume in the latter more than doubled to 494 homes. In the Core Central Region, transactions were up 52 per cent to 32 units.

Besides the new launches that did well, there were several successful re-launches last month, with 100 homes sold at Wheelock Properties’ The Panorama in Ang Mo Kio at a median price of S$1,241 psf, down from its initial launch price in January of a median S$1,343 psf.

Meanwhile, CapitaLand sold another 15 units at Sky Habitat in Bishan at a median price of S$1,336 psf, down from the median S$1,377 psf a month earlier and S$1,583 psf at the initial launch in April 2012, Colliers International real estate agency noted.

“The lower prices have helped buyers to keep within the boundaries set by loan curbs, such as the TDSR of 60 per cent … Developers may be further encouraged to price their projects reasonably due to the cooling measures and increased supply,” said Mr Eugene Lim, key executive officer of property agency ERA.

Analysts said sales volumes are likely to slow down in the coming months with the school holidays in June and the seventh lunar month in August, two traditionally slow periods for property transactions. To keep sales moving during this lull, developers will have to stick to the theme of attractive pricing.

PropNex chief executive Mohd Ismail said: “Ultimately, what matters in the current challenging environment is price — both on a psf and absolute basis. While selected projects which are reasonably priced and well located will continue to attract home buyers, prices are expected to come under some pressure as the potential pool of buyers shrinks and developers face stronger competition for consumer dollars.”

Mr Ismail expects new home sales to average between 900 and 1,000 units a month for the rest of the year, and the annual volume to total 11,000 to 12,000 units.

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