Thursday, July 16, 2009

Record Private Home Sales

Source : The Straits Times, July 16 2009

1,825 sold in June even higher than during peak of the boom in Aug 2007

IT WAS another electrifying month for the private home market, with sales last month surpassing even levels seen at the height of the boom two years ago. The recession-defying numbers for yet another month point to surging confidence among buyers and sellers, and signal that the worst is likely over.


Developers sold 1,825 units last month, up from the 1,673 moved in May and almost 100 more than the number shifted in August 2007, the peak of the boom. Even more remarkable, the April to June sales of 4,714 units surpassed the total of 4,264 new private flats sold last year, said CB Richard Ellis.

It felt like the good old days were back for developers last month, with 1,637 units launched, 475 more than in May, Urban Redevelopment Authority data showed on Wednesday. That was the second highest number of launches since August 2007. Values are also responding to the heightened activity, with median prices at some projects last month higher than in May.

Property consultants cite the continued strong demand since February and June's record sales to tip that the worst appears to be over. Some also expect a price recovery soon.

Colliers International's Tay Huey Ying reckons that last month's record number of primary home sales was driven by pent-up demand from both owner-occupiers and investors. This was helped by prices that remained largely at a discount from peak prices, even if they may have strengthened recently.

City-fringe homes were the most popular last month, with 867 sold, including the 330-unit 8@Woodleigh in Woodleigh Close, which sold out at a median price of $804 per sq ft. The only sell-out project in June, its small, affordable units were a key attraction, experts said.

The return of interest in high-end deals priced above $2,000 psf was also noted last month, said CBRE Research.

A unit in the Ritz-Carlton Residences went for $3,404 psf, while one in The Orchard Residences was sold for $3,299 psf. These made up the 23 high-end deals last month, up from 15 in May. That is still a very small number, but 'a sign that there are high net worth individuals out there who are prepared to buy investment-grade properties despite uncertainties in the economy', said Mr Li.

The narrower price gap is a major factor behind the bullish sentiment, especially among HDB upgraders, said Dr Chua Yang Liang, the firm's head of research for South-east Asia and Singapore. Its number-crunching shows that the price gap between non-prime residential projects and HDB resale flats are now similar to 2004. 'As long as this gap remains tight, this stream of HDB upgraders into the private residential market is likely to continue,' he said.

Nevertheless, these buyers are very price-sensitive. 'There is some upward price movement, but there is no shortage of supply,' said one expert. DTZ's head of South-east Asia research, Ms Chua Chor Hoon, added: 'As the economy has not recovered, and many have taken pay cuts or were retrenched, demand, especially in the mass-market segment, is likely to be sensitive to price increases.'

Read the full story in Thursday's edition of The Straits Times

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