Price cuts revive April private home sales; further discounts expected

[reporter2]

http://www.businesstimes.com.sg/arch...ected-20140516

Published May 16, 2014

Price cuts revive April private home sales; further discounts expected

By lee meixian

[email protected] @LeeMeixianBT


[SINGAPORE] Developers cut prices and succeeded in reviving private home sales last month, possibly setting the stage for further discounts in what's increasingly seen as a buyer's market.

April's private home sales reached the highest level since last November, following price cuts at several projects. Figures released by the Urban Redevelopment Authority (URA) yesterday showed transactions rebounding 55 per cent in April to 745 units, after a slump in March when only 480 units were moved. The figures are based on monthly submissions of private housing sales by developers.

Plagued by property cooling and loan restriction measures and spooked by disappointing sale launches, some developers have been releasing new units at considerable discounts to their initial launch prices to move inventory as their projects near completion.

The combination of discounted relaunches and reasonably priced new launches in the increasingly price sensitive market together drew bargain-hunting homebuyers back to showflats. Analysts said April's sales signalled that underlying demand is still present if prices are attractive, despite the current weak buying sentiment.

Property consultants also said that the good response to the repricing will encourage other developers to follow suit. What could draw buyers, they estimated, could be discounts averaging about 10-15 per cent below previous levels.

Pushing sales through discounts, even if it eats into profit margins, also helps manage cash flow which is needed to finance ongoing construction costs, noted CBRE research head Desmond Sim.

In all, 586 units were launched in April, versus 724 in March.

There were only two new project launches last month - Lakeville in Jurong by MCL Land and The Sorrento by Allgreen Properties at West Coast - which suggest growing caution among developers.

Both projects sold well. The 696-unit Lakeville sold 210 of its 230 launched units at a median price of $1,318 psf, while The Sorrento sold 125 of its 131 launched units at a median price of $1,414 psf. Comparing against historical transactions in the vicinity, JLL national director Ong Teck Hui found their pricing to be "realistic" and "reasonable".

Meanwhile, CapitaLand's Sky Habitat in Bishan also released 80 new units for sale in April - and ended up selling 130 units at a median price of $1,377 psf, a 13 per cent discount from its launch price of $1,583 psf in April 2012.

It was the second bestselling project in April, with sales volume comparable to the 131 units sold in the first month of its launch, although for a condominium situated within the city fringe, its revised psf price is now lower than that of a suburban condominium such as The Sorrento.

Said SLP International research head Nicholas Mak: "The developer's strategy to reduce prices has obviously succeeded in drawing back buyers' attention. The Sky Habitat story is a clear example that it is now a buyer's market."

Smaller units at Wheelock Properties' The Panorama in Ang Mo Kio are also expected to be relaunched at an approximate 10 per cent discount to their initial launch prices. Balloting was supposed to have taken place last Sunday, but it has since been postponed to May 23. The 698-unit condominium has only sold 56 of its 120 launched units as at end-April. Poor turnout at its showflat within the first weeks of its January launch this year had prompted the developer to temporarily close the showflat for a revamp in March.

This month, several anticipated projects, such as Waterfront@Faber in Clementi by World Class Land, CoCo Palms in Pasir Ris by City Developments (CDL), and Commonwealth Towers by CDL and Hong Leong Group, are expected to support launch volumes and sales in May.

April's sales, while an improvement over recent months, still stand well below the 1,384 units sold in April last year before the total debt servicing ratio (TDSR) framework was imposed.

Christine Li, head of research and consultancy at OrangeTee, now expects total sales in May to cross 1,000 units for the first time in 2014, while other consultants believe that the dust from cooling measures and the TDSR framework has somewhat settled, with buyers adapting to the new market conditions.

Others, however, cautioned that while price cuts may excite the market, the biggest problem many buyers face is still the loan restrictions.

[byyboo]

http://www.businesstimes.com.sg/arch...ected-20140516

Published May 16, 2014

Price cuts revive April private home sales; further discounts expected

By lee meixian

[email protected] @LeeMeixianBT


[SINGAPORE] Developers cut prices and succeeded in reviving private home sales last month, possibly setting the stage for further discounts in what's increasingly seen as a buyer's market.

April's private home sales reached the highest level since last November, following price cuts at several projects. Figures released by the Urban Redevelopment Authority (URA) yesterday showed transactions rebounding 55 per cent in April to 745 units, after a slump in March when only 480 units were moved. The figures are based on monthly submissions of private housing sales by developers.

Plagued by property cooling and loan restriction measures and spooked by disappointing sale launches, some developers have been releasing new units at considerable discounts to their initial launch prices to move inventory as their projects near completion.

The combination of discounted relaunches and reasonably priced new launches in the increasingly price sensitive market together drew bargain-hunting homebuyers back to showflats. Analysts said April's sales signalled that underlying demand is still present if prices are attractive, despite the current weak buying sentiment.

Property consultants also said that the good response to the repricing will encourage other developers to follow suit. What could draw buyers, they estimated, could be discounts averaging about 10-15 per cent below previous levels.

Pushing sales through discounts, even if it eats into profit margins, also helps manage cash flow which is needed to finance ongoing construction costs, noted CBRE research head Desmond Sim.

In all, 586 units were launched in April, versus 724 in March.

There were only two new project launches last month - Lakeville in Jurong by MCL Land and The Sorrento by Allgreen Properties at West Coast - which suggest growing caution among developers.

Both projects sold well. The 696-unit Lakeville sold 210 of its 230 launched units at a median price of $1,318 psf, while The Sorrento sold 125 of its 131 launched units at a median price of $1,414 psf. Comparing against historical transactions in the vicinity, JLL national director Ong Teck Hui found their pricing to be "realistic" and "reasonable".

Meanwhile, CapitaLand's Sky Habitat in Bishan also released 80 new units for sale in April - and ended up selling 130 units at a median price of $1,377 psf, a 13 per cent discount from its launch price of $1,583 psf in April 2012.

It was the second bestselling project in April, with sales volume comparable to the 131 units sold in the first month of its launch, although for a condominium situated within the city fringe, its revised psf price is now lower than that of a suburban condominium such as The Sorrento.

Said SLP International research head Nicholas Mak: "The developer's strategy to reduce prices has obviously succeeded in drawing back buyers' attention. The Sky Habitat story is a clear example that it is now a buyer's market."

Smaller units at Wheelock Properties' The Panorama in Ang Mo Kio are also expected to be relaunched at an approximate 10 per cent discount to their initial launch prices. Balloting was supposed to have taken place last Sunday, but it has since been postponed to May 23. The 698-unit condominium has only sold 56 of its 120 launched units as at end-April. Poor turnout at its showflat within the first weeks of its January launch this year had prompted the developer to temporarily close the showflat for a revamp in March.

This month, several anticipated projects, such as Waterfront@Faber in Clementi by World Class Land, CoCo Palms in Pasir Ris by City Developments (CDL), and Commonwealth Towers by CDL and Hong Leong Group, are expected to support launch volumes and sales in May.

April's sales, while an improvement over recent months, still stand well below the 1,384 units sold in April last year before the total debt servicing ratio (TDSR) framework was imposed.

Christine Li, head of research and consultancy at OrangeTee, now expects total sales in May to cross 1,000 units for the first time in 2014, while other consultants believe that the dust from cooling measures and the TDSR framework has somewhat settled, with buyers adapting to the new market conditions.

Others, however, cautioned that while price cuts may excite the market, the biggest problem many buyers face is still the loan restrictions.

The situation now is like increasing volume with falling prices..Doesn't thatrepresnt downtrending? Y people are still so excited about this.

[hyenergix]

The situation now is like increasing volume with falling prices..Doesn't thatrepresnt downtrending? Y people are still so excited about this.

Demand for condos is actually very high in Singapore (despite the soft volume now), in line with increase in number of degree holders. People will upgrade once given the chance (discount). Now is the window period.

[johnlee]

Good point on the increasing number of grads in Singapore and the driving aspirational element behind the desire for private homes

The other element is the number of parents of newly married kids, or even those who are not married, who WANT to buy their kid their first home or at least put down the deposit. So many couples I see these days have their down payment covered by one or both sides of their in laws. A privilege you think...but many of them in the long run don't understand the value (and burden) or home ownership and debt. They take the down payment for granted. One of the problems here is many thus don't have the urge to work hard (or long in the workforce), preferring instead the generosity of their parents : )

[wt_know]

no matter how many grads are there .... private condo price is down down down simply because not every grads earning $10k per month ...
with TDSR at 60% no one can afford current price level of no $1100-$1200psf no talk ... not to mention oversupply of newly completed condo that investors want to let go in the market and unsold units from new launched projects

expect cut cut cut discount discount discount

[reporter2]

http://www.todayonline.com/business/...inglepage=true

Property

New private home sales rebound in April

Analysts TODAY spoke to were divided over how much more room there was for prices to fall.

Published: May 16, 4:13 AM


SINGAPORE — New private home sales picked up last month, recovering from the doldrums they sank into in March after developers shaved prices, and analysts said the market will become more active with several attractive launches expected in the coming weeks.

Last month, 745 private homes were sold, 55 per cent more than the 480 units offloaded in March, data released by the Urban Redevelopment Authority (URA) yesterday showed. The increase in sales was achieved despite developers launching fewer units last month, with 586 private homes being offered for the first time, 23 per cent lower than the 724 units in the previous month.

Compared with the same month a year ago, launches and sales fell 50 and 46 per cent from 1,162 and 1,384 units respectively.

Analysts said that while the cautious mood among buyers persisted following repeated rounds of property market cooling measures, sweeteners and price cuts offered by developers have been successful in attracting some of them back to the market.

Ms Christine Li, head of research and consultancy at property agency OrangeTee, said: “April seems to fare quite well for both the new launches and relaunches. One reason is that developers have priced these projects more realistically, both in terms of the total quantum and the per-square-foot (psf) price, to counter the cumulative effect of cooling measures and loan curbs, drawing buyers back to the show flats.”

The 99-year leasehold Lakeville, the latest offering in Jurong Lake District, was the best-selling development last month, with buyers snapping up 210 of the 230 homes launched at a median price of S$1,318 psf.

The only other new launch during the month, The Sorrento, a freehold project in West Coast Road, also did well with 125 of 131 homes sold at a median of S$1,414 psf.

The two projects helped to prop up sales in the Outside Central Region, or suburbs, by 63 per cent to 487 homes, the URA data showed. Sales volume in the Rest of Central Region rose 87 per cent to 237 units, largely due to the relaunch of Sky Habitat in Bishan at lower prices.

CapitaLand, the developer of Sky Habitat, sold 130 units last month at a median of S$1,377 psf — significantly lower than the S$1,583 psf when the project was first launched two years ago, noted Mr Nicholas Mak, executive director of research and consultancy at SLP International. This brings the total number of homes sold in the development to 312.

“Sales for Sky Habitat have been tepid after April 2012, with the monthly sales volume never exceeding 10 units. The project’s sales even tanked in February and March this year with no sales recorded. The developer’s strategy to reduce prices has obviously succeeded in drawing back buyers’ attention. The Sky Habitat story is a clear example that it is now a buyer’s market,” he said.

Meanwhile, sales in the Core Central Region, or city centre, fell 61 per cent to 21 units last month.

Analysts said the monthly sales volume could trend upwards if developers continue to price their units competitively.

“With reduced demand in the market and buyers looking out for bargains, pricing is crucial in moving sales. Currently, the sweet spot seems to be a 10 to 15 per cent price adjustment below previous levels in order to attract buyers,” said JLL’s national director of research and consultancy Ong Teck Hui.

With developers ramping up launches this month before the seasonal slowdown in June, Ms Li said this month’s volume could breach 1,000 units. New projects due to hit the market this month include Commonwealth Towers, Coco Palms, Waterfront@Faber and Kallang Riverside.