Sales of uncompleted private homes climbed 37 per cent on-month in May as improving market sentiments and optimism of an economic recovery spurred more home buyers to snap up properties.
A total of 1,668 units were sold last month, up from 1,214 in April, bringing the total number of units sold in 2009 to 5,526. This is more than the 4,435 units sold for the whole of last year. But it remains lower than the market peak of 14,811 sold in 2007.
Home sales in the mid-tier market picked up pace in May. The developments that sold the most units last month were Martin Place, The Wharf, The Arte and The Mezzo. These four projects, which are in the prime districts and the city fringe areas, made up more than 30 per cent of the sales.
The median price for these developments ranged between S$903 and S$1,423 per square foot.
Deputy managing director of agency and business services, Colliers International, Grace Ng, said: "There are more properties sold above S$1,000 per square foot. For example, in the month of April, the percentage of properties sold above S$1,000 per square foot is about 28 per cent. In May, this crept up to 29 per cent.
“It seems like physical property prices have corrected more in these categories. In the core central region, property prices corrected over 15 per cent. In the outside central region, it contracted about 16, 17 per cent."
Sales of mid-tier and mass-market developments remained strong.
Projects that had a median price of less than S$900 per square foot made up 45.9 per cent of the total units sold.
Analysts say the buoyant sales could be credited to the upswing in the stock markets.
Associate director of ERA Asia Pacific, Eugene Lim, said: "The current rally is predominantly driven by the upswing in the stock market. Over the past months, we saw the stock market rally, not only in Singapore, but across Asia. This improved sentiments among investors and this is probably the main reason behind people buying units today."
Most analysts say it is uncertain if the coming months will see similar sales, but they expect at least 1,000 sales a month.
Ng said: "We expect that the number of units sold will still be above 1,000 in the month of June and the next few months. But whether it is sustainable will depend on a few factors -- like whether there is a sustained recovery in the property market, whether there are clear signs of declining exports, and whether the developer will increase prices."
And should the momentum persist, analysts say the total number of units sold this year may exceed 10,000.
Lim said: "With the current momentum, we do expect to see more launches coming up. So buyers will have more choice. We will see the momentum continuing unless the market changes for the worse."
And analysts say prices are unlikely to increase much despite strong sales. This is because developers are more focused on clearing stock, rather than making high profits in the current environment.
Lim said: "The main agenda of developers today is to clear stock. And they will be very focused on pricing it competitively to move units rather than go for high profits."
Developers launched a total of 1,161 units in May, up seven per cent compared to April. - CNA/yt
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