Home Sales Up For Third Month In A Row

Source : Channel NewsAsia, 16 August 2008

New home sales rose for the third month in a row in July. However, the pace of growth slowed significantly, with developers launching more homes than they could sell.

According to latest figures released by the Urban Redevelopment Authority (URA), buyers picked up some 900 new private homes last month, 12 per cent more than in June. This comes after new home sales almost doubled between May and June.

But developers launched about 250 more units for sale in July than in June. This meant that more units were launched than sold in July.

Still, property consultants said July's performance could be close to as good as it gets this year. Last month's sales were boosted by mass-market condominium projects, with two large-scale launches accounting for almost half the whole month's figures.

City Developments "Livia" in Pasir Ris sold 301 apartments at S$671 per square foot. "Clover by the Park" in Bishan sold 100 units at an average S$753 per square foot.

While mass-market homes are seen to have the highest potential for sales for the rest of the year, analysts said this may be compromised by the lack of large development launches.

Nicholas Mak, Knight Frank's director, said: "Going forward, we're going to see a shortage of such big projects in the pipeline for the remainder of this year.

"We'll still see launches, just smaller in size, and there won't be this 'wow' factor or excitement that we saw in the previous month. As a result, the sale volume is likely to remain steady or decline in the next few months."

Analysts said transactions are likely to be spread over different project segments, compared to recent months where most attention has been on the suburban segment.

Knight Frank expects an even spread of 30 to 40 per cent sales from each of the sectors.

While a substantial amount of projects launched in July were in the mid-tier range, sales failed to keep pace.

The high-end segment showed continued weakness. No units priced S$4,000 per square foot or more were sold. However, prices in that segment are unlikely to come down anytime soon.

Colin Tan, head of research & consultancy at Chesterton, said: "I think developers who are in this segment are in healthy financial position to hold on. So if prices were to come down, it will take some time but not in immediate future."

The highest sale price in July was achieved by a unit from The Hamilton Scotts. It was sold at S$3,676 per square foot. - CNA/938LIVE/ir