ST : October private home sales beat forecasts

Nov 16, 2010

October private home sales beat forecasts

Over 1,000 units sold last month, rising to nearly 1,600 if ECs are included

By Esther Teo

A HIGHER-THAN-EXPECTED 1,058 new private homes were sold last month, up from 911 in September, leading some property analysts to predict a possible record number of sales for the full year.

The jump was even more pronounced after including sales of executive condominiums (ECs), an upscale type of public housing, as new EC sites went on sale for the first time in five years.

Taking ECs into account, sales surged 74 per cent to 1,587 as buyers in the so-called 'sandwich class' flocked to purchase these two new EC projects.

Esparina Residences near Buangkok MRT station saw 425 units sold, and The Canopy in Yishun had 104 units snapped up.

The sandwich class refers to households whose income falls between $8,000 and $10,000.

Experts said, however, that the buoyant figures did not necessarily mean the Government's property cooling measures in August were losing bite.

They noted that the target segment - mass market condos in suburban areas - had suffered a drop of about 25 per cent in sales volume, compared with the figure in September.

In contrast, homes in the core city centre - involving wealthier buyers less adversely affected by the buying restrictions - saw bumper sales of 335 units. This was almost four times the sales volume in the previous month.

In city fringe areas, 271 homes were sold, up 20 per cent from the number in September.

Jones Lang LaSalle research head Chua Yang Liang said the cooling measures announced on Aug 30, coupled with the rolling out of EC sites, had helped to temper mass market demand.

Mr Ong Kah Seng, Cushman & Wakefield's senior manager of Asia-Pacific research, however, said that while the government measures have had 'some effects on cooling the home buying frenzy, it did not dampen home buying sentiments', as developer sales of private residential units still totalled about 1,000 units each in the two months after the measures were announced.

Analysts suggested that another factor behind the overall rise in home sales was that buyers returned once the impact of the new property rules became clearer.

Permanent residents (PRs), for example, might have chosen to buy a condo rather than an HDB flat, in response to new rules that required them to sell any property they owned abroad if they bought an HDB flat.

The rosy economic outlook, low interest rates and robust stock market have also seeded optimism and confidence in the property market, they added.

Cushman's Mr Ong said: 'Several home buyers who have been on the sidelines for about a month might have decided to proceed with purchasing properties that offer investment potential or a possibility for capital appreciation.'

Ms Tay Huey Ying, Colliers' director of research and advisory, said private home sales this year - totalling 13,109 units in the first 10 months - could be on track to beat the 2007 record of 14,811 units.

An average of 851 homes a month have to be sold for the next two months to equal that figure. With Keppel Land's The Lakefront Residences having sold about 320 units over the weekend, and big launches such as CapitaLand's 1,715-unit residential project on the Farrer Court site set to be launched by year end, that figure seems within reach.

Ms Tay said: 'It shows us that speculative purchases are a minority; the market is not only flush with genuine buyers but also those who are financially strong, such that they can still afford to purchase despite the higher cash upfront needed.'

Foreigners, including PRs, accounted for 34 per cent of all non-landed caveats lodged and captured by the Urban Redevelopment Authority so far for last month. This is the highest for the year and is a sharp jump from the 26.8 per cent average for January to August this year prior to the introduction of the cooling measures, Colliers said.

Ms Christine Sun, Savills Singapore's senior manager of research and consultancy, said buyers might have returned to the market as a long-anticipated post-cooling measure price drop has not happened.

She added that the ECs had also seen good take-up as they had been launched 'at a time when HDB build-to-order flats have been very much oversubscribed and mass market private home prices have skyrocketed'.

In all, 1,070 units at private projects were launched for sale last month, slightly up from 1,058 in the previous month, with sales at The Glyndebourne - located on the Copthorne Orchid Hotel site - topping the table with 112 units sold at a median price of $2,149 per sq ft (psf).

NV Residences in Pasir Ris sold 81 units at a median $831 psf, Suites at Orchard in Handy Road had 80 units snapped up at a median of $2,140 psf, while The Lanai along Hillview Avenue sold 77 units at a median of $1,295 psf.

esthert@sph.com.sg