May sales of private condos double from preceding month's

[SINGAPORE] Developers' sales of private homes nearly doubled in May from a month ago as new launches were priced to target buyers who have become more price-sensitive as a result of loan curbs.

But such robust sales are unlikely to be repeated this month, a seasonally slow period because of the school holidays. Even the World Cup soccer competition could become a distraction for potential buyers in this tepid market, analysts say.

"It is premature to conclude that the market has revived from its slump," said Ong Teck Hui, national director of Research and Consultancy at JLL, pointing to the mixed showing at new launches last month.

Latest data from the Urban Redevelopment Authority showed that developers sold 1,470 private condos last month, the highest level since June 2013 and a 96 per cent jump from the 749 units sold in April. The top five projects made up 78 per cent of total sales in May.

The strong showing is driven by new launches, with 1,790 condo units launched last month compared with only 600 units in April. There were no new launches for executive condos (ECs) last month; 58 ECs were sold, up from 48 in April.

"The increase in the number of new projects launched in May and the strong launch figures do show that developers are more confident in resuming launches as there still many buyers in the market but who are now more price-sensitive," Mr Ong said.

The two top sellers were Coco Palms and Commonwealth Towers - both located near MRT stations and deemed attractively priced. Together, they made up more than half the month's unit launches and sales. Some 590 units at Coco Palms were sold at a median price of $1,018 per square foot (psf), and 275 at Commonwealth Towers were sold at a median price of $1,626 psf.

The Panorama in Ang Mo Kio became a top seller last month, with some 100 units sold at a median $1,241 psf after developer Wheelock Properties slashed prices by around 10 per cent in its re-launch last month. The project moved only 56 units in the initial launch in January at a median $1,343 psf.

Not all new launches fared well, however. Oxley's The Rise@Oxley Residences- the only new launch in the Core Central Region (CCR) - sold eight units out of 120 at a median price of $2,452 psf.

Ecco Development' Singa Hills and Macly Equity's Loft 33 managed to move only two units and 12 units respectively. These projects were apparently launched with little or no fanfare.

"Projects that lack visibility will see greater difficulty in attracting buyers, especially if they are not near transport nodes and the price point is not attractive," said Alice Tan, Knight Frank's head of research and consultancy.

Colliers International director of research and advisory Chia Siew Chuin noted that Commonwealth Towers in Queenstown and Kallang Riverside in Kampong Bugis have benefited from pent-up demand, given the lack of new launches in the two locations.

But developers' sales volume is expected to ease to 600-900 units in the traditional lull period of June, before developers resume their launches ahead of August, which is the lunar seventh month and regarded by the Chinese as an inauspicious period to commit to home purchases, Mr Chia said.

Potential launches in the pipeline include Roxy-Pacific's Trilive, a freehold project in Tampines Road of which 70-80 per cent of the 222 units are dual-key units, which are essentially a 2-in-1 apartments.

Wing Tai opened the showflat last Saturday for its 469-unit The Crest at Prince Charles Crescent, while China Sonangol Land and OKP Land are slated to launch their 109-unit freehold project Amber Skye on Amber Road soon.

Nicholas Mak, executive director at SLP International, expects mass-market condos in suburban areas to continue leading sales islandwide.

Last month, mass-market suburban condos accounted for 64 per cent of sales and slightly over half of total units launched.

This is followed by city-fringe condos in the Rest of Central Region (RCR) that made up about 34 per cent of sales and 39 per cent of units launched. There were only 32 units sold in the CCR or 2 per cent of total islandwide sales.

Mr Mak noted that some developers hurried to launch mass-market condos last month ahead of new EC launches this year. From August to December, five EC projects with a total of 3,100 units could potentially be launched for sale.

With the increased competition, some developers may adopt "a more flexible pricing strategy" to boost their sales, he added. For the whole of 2014, sales volumes in the primary market could total 9,500-12,500 units, Mr Mak predicted. This compares with some 15,301 units sold by developers for the whole of last year.

Source: Business Times 17th June 2014

PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

May sales of private condos double from preceding month's

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