Banner year for property ends with a whimper
Near-record 14,725 private homes were sold in 2009, but only 481 of them in December
By UMA SHANKARI
PRIVATE home sales fell for the fourth straight month in December, sliding 20 per cent month-on-month to just 481 units.
But the market still finished 2009 strongly with a total of 14,725 units throughout the year - about 3.5 times the number of homes sold in 2008. Total home sales were, however, still a shade lower than the peak transaction volume of 14,811 units in 2007.
'It was a year of opportunistic buying as homebuyers realised that prices had corrected from the peak levels in 2007 - starting with mass-market projects in the first half of the year, filtering into the mid-tier, and then to the high-end projects in the second half of 2009,' said Li Hiaw Ho, executive director for research at CB Richard Ellis.
Reflecting the reversal in sentiment, the Urban Redevelopment Authority (URA) index - the yardstick for private home prices in Singapore - fell 18 per cent in the first half of 2009 but rebounded by 24 per cent in the second half.
While buyer interest has shifted noticeably to high-end and luxury homes over the last few months, 2009 belonged to the mass-market segment.
Data from URA showed that of the 14,725 homes sold during the year, 6,064 were in the outside central region (OCR), which is a proxy for suburban mass-market locations.
The top two projects were Frasers Centrepoint's Caspian (712 units sold) and UOL Group and Kheng Leong's Double Bay Residences (601 units sold).
'While there was a filtering-up of demand to the mid-tier segment in Q2 and Q3 2009, and eventually to the high-end/luxury segment in Q4 2009, along with the uplift in economic prospects and market optimism, mass-market projects in the OCR continued to dominate market activity in 2009,' said Colliers director for research and advisory Tay Huey Ying.
Developers launched 14,103 new private homes in 2009, surpassing the previous high of 14,016 units in 2007. The OCR accounted for the most number of units launched.
Sales last year were driven by six months of strong market activity, which saw both launches and sales staying at above the 1,000-unit level from April to September. In July, which was the peak month, both launch and sales volume crossed the 2,500-unit mark.
Strong signs that the sentiments at the luxury segment is recovering is evident from December's sales figure.
An analysis by Colliers International showed that the number of homes priced between $2,500-$3,000 per square foot surged to 37 units - the highest number of transactions in this price band in 2009 and a marked increase from the five units and 15 units transacted within this price band in October and November 2009.
The bulk of the units sold in this price band in December 2009 came from CapitaLand's newly-launched Urban Suites. And the most expensive unit sold by a developer was an apartment at Nassim Park Residences, which was transacted at $3,650 psf.
In fact, the number of units priced above $2,000 psf has been increasing steadily over the four quarters in 2009, according to an analysis by Savills Singapore. The firm's data shows that four homes priced at above $2,000 psf were sold in Q1, 53 in Q2, 165 in Q3 and 283 in Q4.
Looking ahead, analysts said that the private residential market is expected to stay healthy in 2010 with another wave of buying possibly coming after the Chinese New Year celebrations.
'Going forward to 2010, we expect the demand for new homes to be moderated to a more sustainable level of 8,000-10,000 units and home prices to strengthen by 8-10 per cent through the year,' said CBRE's Mr Li. 'Both sales and price momentum will be led by the high-end segment in the first half of 2010.'
Colliers said that in line with the expected pick-up in activity, home prices in the core central region (which includes the prime Districts 9 and 10, the financial district and Sentosa Cove) are expected to witness the strongest increase of 15-20 per cent in 2010, followed by the mid-tier RCR or rest of central region (8-12 per cent), and then the OCR (5-8 per cent).
But analysts are still holding out hope that the mass market could account for a bigger slice of the pie this year, possibly from H2 2010 onwards.
The buoyant HDB resale market may generate demand from HDB upgraders for mass-market projects in 2010. And mass-market volumes should recover as developers go ahead with planned launches in 2010, said PropNex chief executive Mohamed Ismail.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
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