http://www.businesstimes.com.sg/arch...listering-pace
Published July 17, 2012
Despite June blip, home sales set blistering pace
Prices expected to remain stable, as 2012 could see sales hit all-time high
By Kalpana Rashiwala
[SINGAPORE] The momentum may have slowed in June, but developers have sold many more private homes in the first half of 2012 than they did last year.
June saw 1,371 units being sold, excluding executive condos - a 19.5 per cent drop, month-on-month. But in the first six months of this year, developers have offloaded 12,098 units - a big jump from the 8,039 private homes sold during the same period in 2011.
In fact, sales during the first six months are not very far from the 15,904 units sold for the whole of last year, based on preliminary numbers from the Urban Redevelopment Authority (URA).
Property consultants expect developer sales to hit an all-time high of 18,000-22,000 units this year - surpassing the current record of 16,292 units set in 2010.
URA will release the final Q2 developer sales figures, taking into account returned units, on July 27.
Market watchers expect prices to remain stable in the second half. URA's flash estimate for its Q2 2012 private home price index was up 0.3 per cent from Q4 last year.
"With continuous supply coming into the market from new property launches, it is very risky for developers to up prices significantly because if they do so, they may not be able to move units," says Credo Real Estate executive director Ong Teck Hui.
Knight Frank is also looking at a price rise of just 0.5-1 per cent in the second half, as buyers start bucking against high prices especially in the mass-market segment.
SLP International managing director Peter Ow expects private home prices to stay at current levels or dip slightly in the second half, citing supply-demand dynamics.
He agrees that there is a very real possibility that developers could sell 18,000-22,000 units this year - going by the projects that can be launched on sites sold by the state since H2 last year. "Developers would want to launch their projects as soon as possible given the substantial supply pipeline."
This is likely to contain any price hike.
Analysts also point to competing supply from the resale market as buyers warm to more attractive price points for older completed properties. Credo's analysis of caveats points to a significant pick-up in resales - or secondary market transactions of completed private homes - from 1,906 units in Q1 2012 to 3,402 units in Q2; the tally for Q2 could rise as more caveats are lodged in the next few weeks.
Colliers International director Chia Siew Chuin also points to another piece of evidence of stabilising prices. About 55 per cent of new private homes that developers sold in June were at below $1,000 per square foot (psf). In May, only 35.2 per cent of homes were sold in that price range.
However, prices are unlikely to crash assuming demand remains resilient, say industry players. Owner-occupiers as well as investors have been drawn to property as an anti-inflation hedge, especially given the current low interest rate environment and affordable lumpsum investment size as developers include small units in their projects.
"However, if the Singapore economy tanks and retrenchments come into play, sentiment will dive and hit demand," Mr Ow warns.
URA's developer monthly sales stats show that Outside Central Region (OCR), where mass-market projects are located, continued to drive primary-market sales in June, accounting for 81 per cent of the 1,371 private homes excluding ECs sold last month. However, the number of units sold in OCR shrank 8 per cent month on month.
Sales in Rest of Central region dived 67.1 per cent month-on-month to 119 units in June. However, sales in Core Central Region rose 4.4 per cent to 141 units, helped by the launch of 1919 at Mount Sophia - 74 of the project's 75 units sold at a median price of $2,042 psf, notes Jones Lang LaSalle.
Islandwide, June's top selling projects include River Isles in Punggol, with 263 units sold at a median price of $835 psf; Sea Esta in Pasir Ris (255 units at $906 psf median price); and a nearby EC project, Watercolours (201 units at $735 psf median price).
Including ECs - a public-private housing hybrid - developers sold 1,725 units in June, down 16.3 per cent month-on-month. Year on year, however, the June 2012 figure was up 23.7 per cent. Excluding ECs, the 1,371 private homes developers sold in June was up 16 per cent year-on-year.
Developers launched 1,303 private homes excluding ECs and 1,719 units including ECs last month. Both figures are about half the respective numbers in May. Whether ECs are excluded or included, both the launch and sales figures for June were at their lowest so far this year.
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