Developers brace for muted May after active April
Private home sales rose 25.3%, highest monthly figure in nine months
By KALPANA RASHIWALA
(SINGAPORE) April was a good month for developers, with private homes sales surging 25.3 per cent month-on-month to a higher-than-expected 2,207 units. This is the highest monthly figure in nine months and takes the sales tally for the first four months of this year to 6,587 units, nearly 45 per cent of the figure for the whole of last year.
But far from opening the bubbly, industry players are watching how home buyers react to ongoing stock market jitters and fears about a contagion effect in Europe from Greece's problems.
Developers' sales activity is expected to fall in May as there have been few launches so far this month. But projects such as The Minton in Hougang are expected to be launched next week. Allgreen is also previewing The Cascadia at Bukit Timah this week to retail buyers, after selling 187 of the project's 536 units to two funds a few years ago.
Last week, Frasers Centrepoint began sales of Flamingo Valley at an average price of about $1,200 psf to former owners of the site as well as to some of its loyal customers, and will soft launch the freehold project this weekend.
'There'a wait-and-see approach because of Greece but the economic fundamentals of Singapore and the region like China and India are still very strong,' says Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong.
Knight Frank managing director of residential services Peter Ow says another reason developers here have not been active with project launches this month is that they may not have obtained all the approvals for launch, or their showflats or promotional materials are not ready.
Once such hurdles have been cleared, developers with mass-market projects will likely proceed to launch them as 'there's demand in this segment', Mr Ow suggests.
'Those with high-end projects may be more cautious as fears of a contagion effect from the Greece crisis tend to affect this segment more,' he added.
Knight Frank's Mr Ow and DTZ's South-east Asia research head Chua Chor Hoon both reckon developers' private homes sales in May could still cross the 1,000-unit level.
Mr Ow's full-year 2010 forecast is 10,000-12,000 units and Ms Chua predicts the number will 'exceed 10,000 units'. The figure for the whole of last year was 14,688 units.
The 2,207 unit-home sales by developers in April is the second highest level since Urban Redevelopment Authority began releasing monthly developer homes sales data in June 2007. The highest sales volume was 2,772 units in July last year.
The strong sales in April were a function of the surge in launches. Developers launched a total 2,084 homes last month, up 16.4 per cent from March.
Colliers International director Tay Huey Ying observed that 82 per cent of units sold last month were in the '$1,500 psf and below' range, a higher proportion than in the preceding six months.
Besides attributing this trend to a prevalence of units launched in this price band last month, she suggests that it could be an early sign of price resistance.
Urban Redevelopment Authority's figures released yesterday show that 47 per cent or 1,044 units of the 2,207 units sold last month were in Rest of Central Region. Take-up in the location was buoyed by the successful launch of Waterbank at Dakota by UOL Group and new units released at The Interlace.
Sales in the Outside Central Region (771 units) was driven by City Developments Ltd's launch of Tree House condo at Chestnut Avenue.
Islandwide, the top three selling projects in the primary market last month were Waterbank at Dakota (573 units sold at a median price of $1,178 psf), Tree House (374 units at a median price of $835 psf) and The Interlace (144 units at $1,067 psf median price).
'In the high-end segment, 31 units of Marina Bay Suites were sold at the median price of $2,678 psf. Goodwood Residence reported 29 units sold at a median price of $2,488 psf while The Laurels sold another 22 units at $2,904 psf. At the top of the range, one unit of The Orchard Residences was sold at $4,207 psf, followed by a unit in Scotts Square at $3,670 psf and two units in (Hong Leong Holdings') Sage at Nassim Road at $3,205 psf,' says CBRE Research executive director Li Hiaw Ho.
BT understands The Orchard Residences unit sold last month was a four-bedroom apartment above the 40th level while the Scotts Square unit is a two-bedder on a low floor.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Freehold project: Frasers Centrepoint will soft launch Flamingo Valley this weekend
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