Sale of private homes jumps 42% in July

Sale of private homes jumps 42% in July

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.

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. Unsold supply or future supply in the vicinity also contributes to the stabilization of prices in the neighbourhood.

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.

The strong sales in the mid-tier RCR were contributed by the increasing prices of suburban 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.

Interest for ECs is expected to be positive despite the slowdown observed in July, backed by strong housing aspirations and well-designed projects.

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.

Source: Business Times – 16 August 2012