ST : Sales of new private homes surge in July

Aug 17, 2010

Sales of new private homes surge in July

By Joyce Teo

BUYERS returned to the private home market with an extra spring in their step after a lacklustre June laid low by school holidays, the World Cup and the euro zone crisis.

Developers sold almost twice as many new homes last month as they did in June in what some experts are calling a pre-Hungry Ghost Month burst.

Dr Chua Yang Liang, Jones Lang LaSalle's research head for South-east Asia, said the July number is 'a bit of a seasonal spike' as developers and buyers rush to act before the traditionally inauspicious month.

This 'pre-hunger rush' has also been seen in previous years, he said.

There were 1,544 new private homes sold in July against 847 in June, while developers launched 1,335 units compared with 1,010 in the previous month, according to the Urban Redevelopment Authority (URA) yesterday.

New private home sales totalled a robust 9,957 units for the first seven months.

While sales last month were relatively strong, buying interest remained selective with transactions lifted mostly by three new launches.

The top seller was The Scala near the Circle Line's Lorong Chuan station. Officially launched late last month, it sold 400 out of 468 units at a median price of $1,173 per sq ft.

Terrene at Bukit Timah - near the future Beauty World MRT station - sold 162 out of 172 units at a median price of $1,247 psf, while 368 Thomson sold out all 157 units last month at a median price of $1,403 psf.

Local buyers continued to drive the market in July, shown by the high take-up in suburban projects or those outside the central region, experts said.

Projects in the city fringes did relatively well. As with the suburban spots, developments near MRT stations or other key amenities with affordable pricing had better take-up rates, said Dr Chua.

These include the sold-out Centra Studios and Haig 162, and the near sold-out Leicester Suites: All offered affordably priced small format units, said CBRE Research.

Apart from 368 Thomson, prime projects did not attract much attention.

DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said strong buying interest in the mass and mid-end segments continues to be fuelled by low interest rates and an improving economy.

PropNex chief executive Mohamed Ismail noted that the strengthening economy has raised slightly the threshold for the price per square foot that buyers are willing to pay.

A fairly busy July is expected to give way to a slower August because developers are likely to launch fewer units during the Hungry Ghost Month from Aug 10 to Sept 7.

'As we enter the month, coupled with the possibility of a double-dip recession in the US and a sluggish UK economy, we expect sales volume to weaken in August by about 25 to 35 per cent,' said Dr Chua.

'Some volatility may be experienced in the second half as a result of seasonal fluctuations and as the market awaits a clearer growth direction in the US and UK.'