Surprising Jump In New Home Sales Last Month

Source : The Straits Times, 18 Sep 2007

Private property sales up 25%; most were less pricey ones away from central area.

SALES of new private property homes made a surprising jump last month, despite August being a traditionally slow month for property deals.

Home buyers seemed to brush aside the usual worries over buying property during the Chinese Hungry Ghost month - considered unlucky - which falls in August this time around.

In fact, they bought 25 per cent more new homes last month than in July.

And in a departure from previous months, most of the homes sold last month were less pricey ones away from the prime central area.

Indeed, mid-tier and cheaper private properties in suburban districts are being touted as the next big thing in the market, said property consultants.

Last month’s sales were boosted by strong response to cheaper developments such as The Parc Condominium in West Coast Walk and Soleil@Sinaran in Novena. Together, these two projects sold 1,053 units, or 61 per cent of all new homes sold in the month.

In all, developers sold 1,720 new homes last month, according to the latest figures released by the Urban Redevelopment Authority (URA) yesterday.

This compares with 1,381 deals in July and 1,150 in June, when the URA began tracking such data.

Of the new homes sold last month, almost half went for $1,000 per sq ft (psf) or less. There were 820 units sold in this price range last month, double that of July.

The number of pricey homes that cost more than $2,000 psf also plunged. Only 86 of these homes were sold last month, compared to 370 in July.

In general, price growth of new units was ‘muted’ in August, said Ms Tay Huey Ying, director for research and consultancy at Colliers International.

She added that despite the rise in new home sales last month, overall home sales still fell compared to July.

This was mainly due to a decline in secondary market sales, or re-sales of existing homes, she said. All things considered, total home sales dropped 36 per cent last month from July.

Sub-sales - which are re-sales of uncompleted homes and used to gauge property speculation - also fell by about two-thirds, she said.

Ms Tay attributed the fall to the Hungry Ghost month as well as the US sub-prime mortgage crisis, and said that ongoing credit woes may slow home sales this month too.

But she and other property experts agreed that market activity might pick up again in the last three months of the year, with a number of new launches in the pipeline.

The recovery is likely to be led by a long-awaited upswing in suburban home sales, said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

He noted that prices of entry-level condos have already risen and will set new benchmarks in the months to come.

‘Last year, the market was defining mass market condos as those below $600 psf,’ said Mr Ku. ‘But now, we are moving out of that. Already in August, only 5 per cent of condos cost less than $750 psf, and soon, most new launches will be above $800 psf.’