ST : Sales of private homes surge in April

May 18, 2010

Sales of private homes surge in April

But bumper figures not expected to repeat soon due to market caution

By Joyce Teo

PRIVATE home sales hit a near-record last month - but that might have been as good as it is going to get for a while, given the economic storm clouds over Europe and the plunging share markets.

Some 2,207 units were moved in April - up from 1,761 in March and 1,202 in February - to make it the second-highest monthly sales achieved since such data started being released by the Urban Redevelopment Authority (URA) in mid-2007.

The highest level was clocked last July, when 2,772 units were sold.

April's bumper figures showed the 'resilience' of residential demand despite recent measures introduced by the Government, said CBRE Research executive director Li Hiaw Ho.

Still, Government measures and constant monitoring will help to ensure a sustainable demand, he said.

Developers launched 2,084 private homes - landed and non-landed - last month, up from 1,790 units in March, according to URA data yesterday.

New home sales for the first four months this year are at 6,587 units, about 45 per cent of last year's sales.

Two new launches stole the limelight last month.

The 616-unit Waterbank at Dakota in Dakota Crescent was the top seller with an impressive 573 units sold at a median price of $1,178 psf, or $885-$1,443 per sq ft. Only a handful of units are left.

And the 429-unit Treehouse in Chestnut Avenue racked up strong sales of 374 units at a median price of $835 psf.

The Interlace in Alexandra Road, launched last year, also did well last month, with 144 units sold at a median price of $1,067 psf.

Nearly half of the units sold in April were in the city fringes, or what URA calls the rest of central region. That was largely thanks to the sales at Waterbank and The Interlace.

Sales in suburban areas accounted for about 35 per cent of the total. Sales in the city centre were encouraging as previously launched units continued to be absorbed by the market, experts noted.

Cushman & Wakefield managing director Donald Han told The Straits Times: 'I suspect the current market will continue to see high demand from the mass market, and prices will still go up, but albeit at a slower pace than the 5.6 per cent rise in the first quarter,'

But Mr Han and other experts expect to see lower sales this month. There have been few launches, though Flamingo Valley has just sold 36 units at a weekend preview. Prices are from $900-$1,580 psf.

'Fewer launches are expected this month. There is also a lot of caution in the market now because of the Greek crisis, the languishing stock market and also because the property market has moved too fast in too short a time,' he said.

Colliers International's director for research and advisory, Ms Tay Huey Ying, suggested that some buyers may prefer to wait for future launches from the recent spate of government land sales.

Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, added: 'The 2,000-plus level is of concern as to whether it is a sustainable level of demand.'

The sovereign debt crisis unfolding in Greece threatens to bring on a contagion effect in the eurozone, which may hit the nascent recovery for the global economy.

Sentiments have thus weakened, with buyers taking a more cautious approach in the past few weeks, he said.

The market is likely to pull back to a more sustainable level of around 1,000 units per month for the rest of the year, with total volume likely to be between 13,000 and 16,000 units, Dr Chua added.

Affordability is likely to remain a concern given that projects now doing well have a lower price quantum, he said.

Ms Tay said the concentration of purchases priced up to $1,500 psf and the dip in deals priced above that level could be early signs of buyer resistance towards pricier non-landed homes.

joyceteo@sph.com.sg