http://www.businesstimes.com.sg/arch...sales-20130216

Published February 16, 2013

Rush to beat curbs propels home sales

Excluding ECs, 2,013 deals are struck in January - the highest in 4 months; buyers also attracted by developers' discounts and rebates in the wake of cooling measures

By Mindy Tan


PRIVATE-HOME sales surged 42.8 per cent in January from the month before, as developers dished out discounts and rebates to entice buyers in the wake of the seventh round of cooling measures.

Excluding executive condominiums (ECs), a total of 2,013 transactions were clocked in in January, up from 1,410 in December. This was the highest in four months, and exceeded the 1,799 units launched by developers.

The surge in sales was powered by strong take-up in the first 11 days of the month (prior to the announcement of cooling measures), and subsequent aggressive marketing in the form of price discounts and rebates to buyers and/or higher incentives to agents to encourage sales, said SLP International research head Nicholas Mak.

Buyers who rushed to lock in their purchases before the cooling measures on Jan 11 - which included higher additional buyers' stamp duty (ABSD) as well as stricter borrowing limits - kicked in, helped drive sales.

Said Mohamed Ismail, chief executive of PropNex Realty: "We believe there was a sudden surge in the demand for private homes especially on the day of the announcement."

EL Development's La Fiesta, one of many showflats that stayed open late, saw snaking queues on Jan 11, as potential buyers tried to beat the midnight deadline. The project, located in Sengkang, recorded 404 transactions in January.

"(EL Development) had earlier shared that it had sold 360 units in the project before Jan 12. . . So by deduction, it probably sold about 44 units after Jan 12," said a market watcher.

According to the Urban Redevelopment Authority (URA), about 60 per cent of the units (excluding ECs) sold by developers were sold before Jan 12 while the remaining 40 per cent were sold from Jan 12.

January's sales were also buoyed by attractive incentives offered by developers, noted Joseph Tan, CBRE's executive director, residential.

Q Bay Residences (372 sales), for instance, offered stamp duty discounts of 5 per cent to 7 per cent, while D'Leedon Residences (263 sales) offered discounts of up to 15 per cent. Of this, 163 units at D'Leedon were moved from Jan 12.

Mass-market suburban regions (Outside Central Region) contributed 63.9 per cent of total sales (1,287 transactions), a marked increase compared to the 44 per cent recorded a month earlier. The Core Central Region and Rest of Central region made up 17.4 per cent (350 sales) and 18.7 per cent (376 sales) of January sales, respectively.

Ong Teck Hui, national director, research & consultancy, Jones Lang LaSalle, said: "While 2,013 units sold in January is a healthy figure, it is still way below the robust figures of 2,393 to 2,621 units achieved for four months in 2012.

"The market experience in January tells us that while cooling measures remain in place, projects with attractive locations and realistic pricing will still be able to draw buyers and achieve good take-up rates."

Alice Tan, senior manager, consultancy and research, at Knight Frank, concurred, noting that the price quantum remained a key consideration for home buyers.

"Smaller-sized homes with affordable price points at good locations would see higher demand. Developers who are launching projects after the Chinese New Year festive season are likely to unveil enhanced design and price offerings to entice buyers," she said.

Sales of EC units dropped 69.8 per cent to 256 units. Including ECs, a total of 2,269 residential units were sold in January, on a par with the 2,259 units sold a month ago.

Consultants expect slower sales in February, in the light of the usually quiet Chinese New Year, even though a handful of developers had opened their showflats over the festive season.

Lee Sze Teck, senior manager, training, research and consultancy, at DWG, said barring any major project launches, he expected transaction volume to be low, at around 1,000 units.

Ong Kah Seng, director at R'ST Research, said that given that January's numbers are a confluence of rebates, attractive pricing and ample new launches, such "robust buying is expected to be short-lived".

He expects sales volumes to moderate to about 1,500-1,800 transactions per month on average in the first half of 2013. "There is a limit on further discounts, rebates and incentives developers are willing to give," he said.

The focus will be on Sennett Residences and Urban Vistas for February, said Alan Cheong, Savills Singapore's head of research.

"A successful take-up of these projects at prices in the $1,500-$1,600 psf range would send a clear message to legions of naysayers that property prices are not coming down and demand is still firm, at the 1,500 unit level.

"The recent passage of the Population White Paper plus the release of the Land Use plan is sending a subliminal message to the public to act given that the future looks bright for residential properties. With liquidity aplenty and price expectations still positive, the power drivers for private residential properties are stronger than the retarding factors."