October non-landed home sales up 60 per cent from a month ago
Singapore - DEVELOPERS in Singapore sold 546 private non-landed homes in October, which represented a 60 per cent rise from 341 in September, according to the Urban Redevelopment Authority (URA).
The launch of two projects during the last weekend of the month - Principal Garden at Prince Charles Crescent and Thomson Impressions at Lorong Puntong - gave the October sales tally a shot in the arm as they made up 35.3 per cent of the month's new sales.
Developers UOL Group and Kheng Leong Company sold 113 units at Principal Garden out of the 200 units released at a median price of S$1,633 per square foot (psf), while Thomson Impressions, jointly developed by Nanshan Group and Vico Construction Pte Ltd, sold 80 units at a median price of S$1,399 psf.
But despite the improvement last month, the overall private residential market remains subdued as the effects of the cooling measures are now compounded by an economic slowdown and a looming interest rate hike in the US, JLL national director of research and consultancy Ong Teck Hui observed.
R'ST Research director Ong Kah Seng said he expects developer sales activity to be sluggish in November and December. Overall developer sales of non-landed residential units in each month could be at least 10 per cent lower than October's 546 units with a high chance of not crossing the 500-unit mark.
Owing to new project launches located in the city fringes, slightly more than half of all private non-landed homes (excluding executive condominiums) sold in October were located in the Rest of Central Region and 44 per cent in the Outside Central Region.
Among other top selling projects, GuocoLand's 1,024-unit Sims Urban Oasis moved another 46 units in October at a median price of S$1,285 psf, suggesting that prices are about 8 per cent below the median selling price of S$1,400 psf in the first three months of launch early this year.
Some agents told BT that the developer has raised the agent commission from 0.8 per cent to about 1.5 per cent with the release of new units at Sims Urban Oasis last month at "launch day prices", with more two bedders being snapped up.
Studying the sales-to-launch ratio in October, SLP International executive director Nicholas Mak noted that the ratio improved to 125.8 per cent in October from 87.2 per cent in September, which means there was paring down of unsold units that have been launched. The last time this parameter crossed 100 per cent was in July, when the popular 1,390-unit High Park Residences was launched.
Including executive condominiums (ECs), developers sold a total of 822 units in October, up 31 per cent from 629 units in September. CDL's EC project The Criterion in Yishun started selling from Oct 10, with 41 EC units sold in the month at a median price of S$805 psf.
But unsold inventory of launched EC units reached 3,709 units in October, up from 3,435 in September, developers' sales data shows.
Mr Ong noted that newly launched EC projects are not making much sales progress. Apart from The Criterion, six other new EC projects launched this year have take-up rates of between 21 per cent and 43 per cent. "At selling prices of around S$800 psf, buyers are less enthusiastic and less willing to commit than before when market conditions were more positive," he reckoned.
Mr Mak noted that the raising of the monthly household income ceiling for EC purchase from S$12,000 to S$14,000 has not significantly increased the demand for ECs in the primary market. Some potential EC buyers could be drawn to the HDB primary and resale markets while others may be waiting for other EC projects to be launched before they commit to purchasing their EC units, he said.
With the holiday season kicking in, market activity is expected to be muted in the remaining two months of the year, Mr Ong said. "Using developer sales of 653 units in November and December 2014 as a guide, new private home sales in the last two months of 2015 are likely to taper. With 6,383 units sold in the first 10 months of 2015, the full year figure is likely to be below last year's 7,316 units."
Some property consultants are still hopeful of an upside surprise from the upcoming launch of The Poiz Residences by MCC Land this month, which has a retail component The Poiz Centre. This project along Upper Serangoon Road and Meyappa Chettiar Road was renamed by developer after St Andrew's alumni protested against its original name "The Andrew Residences".
"Response towards new launches implied that there is still demand in the market," said OrangeTee senior manager for research and consultancy Wong Xian Yang. "Prudent investors are still looking for value propositions despite the dim market outlook and persistent headwinds such as increasing interest rates and looming supply in the pipeline."