High Q1 home sales volume not sustainable...

The high sales volume of new private homes seen in the first quarter of 2012 is not likely to be sustainable, according to real estate consultancy CBRE.

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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Bishan more expensive than Grange Road..?!

Not many would have imagined the day when a condo in Bishan actually costs more per psf than one (albeit older) in Grange Road or River Valley?

But for the wife and I, we will take Grange Road/River Valley anytime!


Reference: "Will Bishan's Sky Habitat shatter price ceiling?" - The Straits Times, 29th Mar 2012

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So how did the resale market do in Feb 2012?

Prices of resale private homes are 0.8% cheaper in February than in the previous month.
This is according to the NUS Singapore Residential Price Index (SRPI ).

Still, analysts expect overall prices to rise by between 0.5 and 3% in the first quarter.

Since January, the market for new private homes have been abuzz, with eight in 10 buyers being locals.

In December last year, the government introduced cooling measures like the Additional Buyer's Stamp Duty (ABSD).

Back then, many had predicted property prices to go down by as much as 15%.

ERA key executive officer Eugene Lim said: "The measures are working in the sense that foreigners... [during the] pre-ABSD days make up almost 20% of the market. Today, they account for less than 7%of transactions, as far as new home sales are concerned."

Excluding executive condominiums, nearly 2,413 new private homes were sold in February, more than a third from January's.

But in the secondary market, where it includes the resale market and the more speculative resale of uncompleted private units, it is a quieter affair.

While private new home sales have spiked up in the last two months, experts noted the resale and sub-sale markets have been slow, and that should stablise the property price index in the first quarter of this year.

Jones Lang LaSalle research head Chua Yang Liang said: "In the first, second quarter, we are going to continue to see that kind of disparate, two-market behaviour, top and new sales and resale.

"New sale markets tend to... do better because of the conditions in there -- the financing and progressive payments".

"You don't really need to make immediate payment, except according to the construction phase. Interest rates remain fairly low for now, and that is going to be more helpful for both markets".

OrangeTee research director Tan Kok Keong said: "We are likely to see more launches, as well as strong sales, unless there are instances of sharp economic shocks externally.

"In terms of pricing, I do think that developers are pricing it at lower end of market expectations, so I do think that prices will continue to climb, but on a moderate level, meaning you are looking at one to two per cent price increases, going forward, in the primary market."

With more Government Land Sales sites being taken up by developers, the supply of new private homes should meet demand. And that is a major price stabiliser for many analysts.

Source: Channel News Asia

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All about the subsale market....

The Business Times today reported that a record 98.1% of 2011's subsales were still profitable even after counting the seller's stamp duty (SSD) where applicable as the overwhelming majority of the 2,337 units subsold last year had been purchased prior to the punitive SSD regime taking effect for units bought on or after Jan 14, 2011.

The average gain per unit for 2011 subsales was at a three-year high, according to a caveat analysis by Savills Singapore. Subsales refer to secondary market transactions in projects that have yet to receive a Certificate of Statutory Completion. Such deals are often seen as a guage of the level of speculative activity in the property market.

 

And for those wondering how shoebox units fared in the subsale market in 2011, the article below will throw some light on the subject.


Reference: "Shoebox units feature in last year's subsales"- The Business Times

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Secondary market continued to soften in 1Q2012

Non-landed home prices in the secondary property market in Singapore continued to soften in the first quarter of 2012, with those in the prime districts 9, 10 and 11 faring worst.

According to a report by DTZ Research, resale prices of luxury condominiums and freehold condominiums in the prime districts fell by 0.8% and 0.7% respectively.

Resale prices of leasehold condominiums in the suburban areas registered a slight quarter-on-quarter increase of 0.3%, a moderation from the 1.0% growth in Q4 2011.

Transaction of non-landed homes also slowed to about 470 units per month over January and February. This was also lower than the monthly average of about 1,400 units in 2011.

DTZ Research attributed the lower prices and transactions to property cooling measures such as the Additional Buyer's Stamp Duty measures implemented in December last year.

Competition from uncompleted projects is another factor that has impacted resale property sales, the DTZ report added.

The report highlighted that a high monthly average of 2,200 new units, excluding executive condominiums, were launched in January and February, compared to a monthly average of 1,510 units launched in 2011.

Resale prices of landed homes, however, rebounded in Q1 2012 after moderating growth for two consecutive quarters.

Freehold landed homes in suburban areas and prime districts 9, 10 and 11 respectively registered stronger price increases of 1.6% and 1% on-quarter, compared to 0.7% and 0.8% over the last quarter of 2011.

DTZ said that primary sales, excluding executive condominiums, averaged 2,143 units per month in the first two months of 2012, higher than the 2011 monthly average of 1,364 units.

Chua Chor Hoon, Head of Asia Pacific Research at DTZ said: "Projects that were launched previously are being re-launched to ride on the current buying momentum. If purchase demand continues to remain strong at above 1,500 units a month, we do not preclude the possibility of further government cooling measures."

Source: Channel News Asia

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