In the first three months of 2012, CBRE expects 5,200 units of new private homes to change hands, the second highest since the 5,578 units sold in Q3 2009.
The strong demand is primarily driven by a large supply of new units in the market, high liquidity as well as low interest rates.
Li Hiaw Ho, Executive Director at CBRE Research said, "This increase in sales is due in large part to the slew of projects featuring compact apartments that have flooded the market in recent years."
CBRE says the smaller quantum of each unit makes compact apartments - or what's commonly know as "shoebox apartments" - very affordable.
And they also provide a safe haven for investors who are keen to park their savings.
CBRE says the few projects that were fully sold in Q1 were Guillemard Edge (275 units at a median price of $1,215 psf), Casa Cambio (198 units at a median price of $1,390 psf), Millage (70 units at a median price of $1,350 psf) and Tree Scape (30 units at a median price of $1,400 psf).
As at end-February, the three top-sellers were Watertown in Punggol Central with 924 units sold, The Hillier in Hillview Avenue with 457 units sold and Parc Rosewood in Woodlands with 577 units sold.
In tandem with the increased sales activity in Q1, CBRE says the high-end segment which has been fairly quiet also showed a pick-up in activity.
The Scotts Tower reported 13 units sold between $3,311 psf and $3,680 psf; two units in Scotts Square were sold at $4,661 psf and $4,533 psf, and a unit in Skyline@ Orchard Boulevard was sold at $4,140 psf.
Despite the thin transaction volume, CBRE says high-end prices were still holding out.
The real estate consultancy also observed strong sales volume for Executive Condominiums (EC) after the government tweaked policy to raise the proportion of ECs allocated to second-time home buyers from 5% to 30%.
In the weekend following the announcement, CBRE says 82 units in Twin Waterfalls were sold to second-timers and around half of this number was sold to the same group at Tampines Trilliant.
Looking at the sale of recent EC projects, CBRE notes that some 60% of the buyers were second-timers, a reversal from the period before 2005 when some 80% of the buyers were first-timers.
Going on to Q2, CBRE expects developers to continue to focus on marketing mass-market projects as buying interest in this segment is expected to remain healthy.
And it says developers should be able to sell around 1,000 units per month.
Source: Channel News Asia
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