Demand for private residential homes, excluding executive condominiums (ECs), rebounded in July, with 1,943 units snapped up last month, 42 per cent more than the 1,371 units sold in June.
Even as mass-market sales continued to monopolise the market, the Core Central Region (CCR) – which includes Districts 9, 10 and 11, Downtown Core (including Marina Bay) and Sentosa – saw the steepest rise in buying activity, with 253 units sold in July, an increase of 79 per cent month on month.
This was propped up by the launch of V on Shenton – 144 of the 190 units at the development sold in July, at a median price of $2,061 per square foot (psf), making up 57 per cent of sales in the region.
Sales in the Outside Central Region (OCR), where mass-market projects are located, also continued to drive primary-market sales, accounting for 77.7 per cent, or 1,509 of the 1,943 private homes (excluding ECs) sold last month.
Two of July’s top-selling projects, Parc Centros in Punggol and Parc Olympia at Upper Changi, sold 492 units at a median price of $924 psf and 204 units at $874 psf, respectively.
Said Chua Yang Liang, head of research, South East Asia, Jones Lang LaSalle: “The modest median launch prices of $874 and $924, which are fairly comparable to the neighbouring projects, reflect local buyers’ growing resistance to further price increase.”
According to Credo Real Estate executive director Ong Teck Hui, new projects have to be priced in line with previous pricing benchmarks, especially if there is still unsold supply or future supply in the vicinity.
A Treasure Trove, which is near Punggol MRT Station, was marketed last year with a median price of $918 psf and enjoyed 86 per cent take-up rate within the first month of launch.
Parc Olympia achieved 58 per cent take-up at a median price of $874 psf, rather similar to adjacent Palm Isles which had a median price of $867 psf and a 68 per cent take-up after two months, he added.
Mohamed Ismail, chief executive of PropNex Realty, agreed, noting that as long as new projects are priced at below $1,000 psf, they can expect healthy demand.
He added: “Prices for new projects will remain competitive as there will be added pressure for developers to price their projects reasonably as the increased supply will mean that prospective home buyers can afford to be more selective… On the whole, we expect residential property prices in Singapore to remain at a gradual growth of 1-2 per cent for 2012.”
Elsewhere in the Rest of Central Region (RCR), developers sold a total of 181 units out of the 281 released.
The only new project launched, The Line @ Tanjong Rhu, found 13 buyers for the 62 units released from the 130-unit development.
Other previously launched developments such as Eight Riversuites (33 units sold), M66 (28 units sold), Nottinghill Suites (12 units sold) and Idyllic Suites (11 units sold) continued to move units. As a result, sales volume was up 52.1 per cent in the region.
Said Nicholas Mak, executive director, research and consultancy, at SLP International: “The strong sales in the mid-tier RCR were contributed by the increasing prices of suburban homes. For example, Naung Residence, a new development located in the OCR that was launched in July 2012, sold six units at a median price of $1,455 psf, which was at the upper-end of the price range of mid-tier homes.
“In July, about two-third of the private housing units sold in the RCR were in the price range of $1,001 to $1,500 psf. Thus, the overlapping of prices of private homes in the OCR and RCR could make the housing units in the RCR more appealing to home buyers.”
In the EC market, 124 ECs were sold in July, contributed mainly by Tampines Trilliant, One Canberra and Watercolours which sold 37, 21 and 19 units, respectively. Noted Lee Hiaw Ho, executive director, CBRE: “The sales momentum of ECs has slowed down somewhat due to more choices available in the market.”
That being said, interest for ECs is expected to be positive, backed by strong housing aspirations and well-designed projects, suggested Ong Kah Seng,
He qualified: “However, the five-year minimum occupation period and the requirement to dispose of HDB flat after occupation of EC may discourage some buyers who are looking at long-term investment possibilities and capital appreciation of their HDB flat, especially for those which are in established estates with good property leasing fundamentals.”
Looking ahead, primary market activity is expected to slow down in August, due mainly to the seventh lunar month, noted Chia Siew Chuin, director of research and advisory, Colliers International. “Developers are expected to stagger new supply in order to sustain home-buying momentum, concentrating on moving units from previously launched projects. Sales volume is expected to ease to about 1,300-1,600 units. Meanwhile, positive performance in the CCR may embolden some developers to step up on moving more units in the region,” she added.
Some projects, including Eco, Riversails and One Dusun, have already started gathering interest ahead of their launches which might be scheduled for September, noted Lee Sze Teck, senior manager of research and consultancy at DWG.
“Other possible launches in the next few months include Skies Miltonia, The Sennett, Waterbay and Heron Bay. Waterbay and Heron Bay are both EC projects,” he added.