Wednesday, February 20, 2013

Strong new home sales driven by mass market

Rush to avoid new curbs, developer discounts lead to January sales spike
The Straits Times - February 16, 2013

ONCE again, mass market homes were overwhelmingly the main driver of new home sales.

Suburban condominiums accounted for nearly two-thirds of developer sales last month.

The latest round of cooling measures, effective Jan12, led to higher sales as some buyers scrambled to avoid the curbs, while others were lured by developer discounts offered in their wake.

But analysts said demand would likely slow down in the coming months, as the full effects of the measures sink in.

The high-end market in the city centre and mid-tier market in the city fringe made up 17per cent and 19per cent of January developer sales respectively.

The number of suburban private homes sold, at 1,287 in January, was more than double December's figure of 620.

This helped to drive total developer sales to 2,013 units last month, 42.8 per cent higher than the number sold in December and 7.5 per cent higher than the same month last year.

In fact, sales exceeded the 1,799 units launched by developers last month, and CBRE Residential executive director Joseph Tan said they were "higher than usual".

The boost came in the main from two new project launches. La Fiesta, next to Sengkang MRT station, sold 404 units, while QBay in Tampines sold 372 units.

The majority of the sales at the 810-unit La Fiesta came on the night of Jan 11, right before the cooling measures kicked in.

Attractive discounts offered after the cooling measures kicked in on Jan 12 also gave a fillip to sales.

The 630-unit QBay was launched after the new measures, with its average prices slashed from $1,050 per sq ft (psf) to $985 psf for its preview sales.

At the 1,715-unit d'Leedon in District 10, 263 units were sold last month following the cooling measures, after its developer dangled discounts of up to 15 per cent.

The new curbs pushed up transaction volumes last month due to last-minute deals from buyers seeking to avoid the higher additional buyer's stamp duty, said DWG senior manager Lee Sze Teck.

Reduced loan-to-value ratios implemented could also have caused some buyers to reassess their finances and buy lower- priced or smaller units in suburban areas instead, Mr Lee said.

An Urban Redevelopment Authority spokesman said that about 60 per cent of the developer sales last month came before the cooling measures took effect.

Some suburban homes also set benchmark sales prices. In recent weeks, a unit at freehold condominium Hillbrooks in Bukit Batok changed hands at $1,086 psf, while a unit at 99-year leasehold condominium Rivervale Crest in Sengkang was sold at $913 psf.

Analysts said that despite January's strong sales volume, demand for private homes could fall in the next few months by as much as 15 per cent.

DWG's Mr Lee reckons this month's transaction volume will be around 1,000 units, but volumes will likely pick up from next month after a number of major launches. The next expected major launch is The Trilinq, near Clementi MRT station.

Knight Frank senior manager Alice Tan said: "Developers who are launching projects after the Chinese New Year festive season are likely to unveil enhanced design and price offerings to entice buyers. First-time Singaporean homebuyers would be the potential group of prospective buyers to contribute to private home sales for the next two quarters or so."

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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