Developers Rush To Catch Buying Wave

Source : The Straits Times, June 17, 2009

Push factors: Concerns that interest will fizzle out, Hungry Ghost month.

HOME hunters can expect a wider choice as property developers look to bring forward project launches in a bid to ride a strong wave of home-buying.

They have been encouraged by a stunning surge in private home sales; figures this week show May sales at 1,668 units - the highest level since August 2007.

Allgreen held a special preview for its 152-unit One Devonshire last week. Other developers are rushing to launch projects in the light of good sales in May. -- PHOTO: ALLGREEN PROPERTIES.

Sentiment has improved significantly in recent months, in line with stock market rises, while the sale prices of new homes appear to have crept up from the lows they sank to earlier this year.

But there are increasing concerns this buying wave may not be sustainable. Some analysts argue that the pace of the upswing is too fast and too furious, given that rents are falling amid the weak economy and that a plentiful supply of new homes is coming onstream.

And with the stock market taking a breather, there are worries this will hurt demand. Consultants say some buyers had bought property with the money they made from stocks.

Also, the heat has been confined mostly to certain property launches. HSR Property Group executive director Eric Cheng said the action in the resale market is largely in mass market properties.

Given this, developers with launch- ready projects are likely to be keen to get sales under way quickly. Apart from rushing to get sales permits in order to catch the buying wave, developers would also want to launch before the Hungry Ghost month, said Mr Cheng.

Hungry Ghost month - the 7th month of the lunar calendar - starts on Aug 20 this year. Superstitious buyers may not want to buy a home during this period.

This weekend, SingBuilders will be launching 26-unit Spring @ Langsat near the Eunos MRT station at an average price of $820 psf. A preview last month saw nine units sold at prices ranging from $822 psf to $1,010 psf.

Propnex, which is marketing the project, said the launch decision was made just last week. 'Market sentiment is good. This is the best time in eight months to launch,' said its chief executive Mohamed Ismail.

This weekend will also see the launch of the freehold Parc Seabreeze in Marine Parade. Agents have advertised it at prices of $1,200 psf to $1,400 psf.

Far East Organization is also expected to launch the freehold 280-unit Vista Residences in Jalan Datoh soon.

A classified ad gives the special preview date as June 24 and the price at $980 to $1,200 psf. It is near The Arte - launched at $880 psf in March and sold at a median price of $933 psf in May.

Soft marketing has started for the the 437-unit Waterfront Key project in Bedok Reservoir, the 388-unit Oasis@Elias in Pasir Ris and Frasers Centrepoint Homes' 330-unit leasehold project near the Woodleigh MRT station.

Waterfront Key is the second of four condos to be built by Far East and Frasers Centrepoint on the former Waterfront View estate site. The first, Waterfront Waves, was relaunched in the first quarter at a reduced average price of $600 psf, down from $800 psf early last year.

To capitalise on the better mood, Wing Tai recently soft launched Belle Vue Residences at Oxley Walk while Allgreen Properties started a special preview for the freehold 152-unit One Devonshire near Killiney Road last week.

DMG Research said in a report yesterday that it expects the sales momentum to persist for the next six to nine months.

Already, the strong sales momentum has reignited interest among developers in buying sites. DTZ Debenham Tie Leung (SEA) yesterday put up two sites for tender - the first two official distressed sales sites - to take advantage of the improved sentiment.

'There's been a trending up of take-up rate so this is a window of opportunity for developers to launch their projects,' said its senior director for investment advisory services Shuan Poh.

DTZ was appointed by the receiver and manager of Consult Asia to sell the two sites. One is at the corner of Changi Road and Still Road and the other in Balestier Road. 'There are developers who sold their projects very well recently and are eagerly looking for more mass and mid-market sites to launch or to invest in. If they want to rush the Changi site, they can take as little as three to four months to get everything ready for launch,' said Mr Poh.


Coming up

One Devonshire
Where: Killiney Road, near Somerset MRT station
Developer: Allgreen Properties

Spring@Langsat
Where: Langsat Road, near Eunos MRT station
Developer: SingBuilders

Parc Seabreeze
Where: Marine Parade Road
Developer: Tiong Aik

Vista Residences
Where: Jalan Datoh (Balestier)
Developer: Far East Organization