Skip to main content

Advertisement

Advertisement

Single project helps boost new private-home sales

SINGAPORE — Sales of new private homes last month jumped to its highest level since the Total Debt Servicing Ratio (TDSR) came into effect two years ago, but the increase was driven by a single development and does not reflect an improvement in market sentiment, analysts noted.

Single project helps boost new private-home sales

A condominium in Singapore. TODAY file photo

SINGAPORE — Sales of new private homes last month jumped to its highest level since the Total Debt Servicing Ratio (TDSR) came into effect two years ago, but the increase was driven by a single development and does not reflect an improvement in market sentiment, analysts noted. 

Developers sold 1,594 private residential units last month, more than four times the 375 units sold in June and thrice the 511 units offloaded in July last year, Urban Redevelopment Authority (URA) data showed today (Aug 17). 

The huge increase was largely due to the launch of High Park Residences in Sengkang, where 1,169 of the 1,186 units offered were snapped up. Thanks to the response, the Fernvale condominium alone accounted for 73 per cent of total developer sales transactions last month. 

In total, developers launched 1,468 homes, up from 219 units in June..

The main reason for the robust response to High Park Residences is affordability, analysts said. 

“The median launch price of S$989 psf was considered fairly attractive as it is below the psychological level of S$1,000 psf. Furthermore, High Park Residences offers a large number of small units,” said SLP International Property Consultants’ executive director Nicholas Mak. 

“Based on the caveats lodged, the median size of shoebox units in High Park Residences was 42 sq m with a median price of S$467,500. Private homes with prices below the threshold level of S$500,000 may appear to be an attractive deal.” 

Excluding High Park, new private-home sales totalled 425 units in July, which is “positive” as it surpassed June’s figures, noted Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia. Botanique at Bartley on Upper Paya Lebar Road led sales of previously launched projects with 63 units at a median of S$1,282 psf.  

In the executive condominium (EC) segment, transactions rose to 495 units last month from June’s 110. This was largely contributed by two new launches, which propped up the number of launched units to 1,155 in July. 

No ECs were launched in June. The Brownstone on Canberra Drive was the bestselling EC last month with 187 units sold at a median S$818 psf. The other new launch, The Vales, registered 79 transactions at a median S$788 psf.

Despite July’s figures, analysts expect the private residential market to stay soft as long as the restrictions put in place since 2009 remain. Minister for National Development Khaw Boon Wan told TODAY last week that it is still not the right time to adjust the curbs. 

Besides TDSR, other measures blamed for the current subdued market include the Additional Buyer’s Stamp Duty and Loan-to-Value limits.

Adding pressure to the market are rising interest rates. The Singapore Interbank Offered Rate, commonly used to price mortgages here, has been climbing in anticipation of a rate hike in America.

“This stunning performance in July is an exception and is not likely to cause a major shift in our forecast on overall transaction volume. I hold on to my previously held view that new sales in 2015 should remain at between 6,500 and 7,500 units,” said Dr Chua Yang Liang, JLL’s head of research for Singapore and South-east Asia. New home sales halved to 7,316 units in 2014 from a year earlier, the lowest since 2008, URA data showed. 

Analysts said this month’s sales figure might suffer as developers typically hold back launches during the Hungry Ghost month of the lunar calendar. 

Mr Mak said: “As primary market sales volume is highly correlated with launch volume, the former may fall in the coming months as the number of major condominium projects lined up for launch in the next 12 months would be lower than that in the previous 12 months.”

Read more of the latest in

Advertisement

Popular

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.

Aa