Developers and buyers headed for a stalemate

[mr funny]

http://www.businesstimes.com.sg/sub/...18340,00.html?

Published June 16, 2010

Developers and buyers headed for a stalemate

Big drop in May sales could signal the start of a slowdown, with neither side in any hurry to transact

By KALPANA RASHIWALA


(SINGAPORE) Developers sold just 1,078 private homes in May - about half the 2,208 units they transacted in April. This could mark the start of a period of slower sales as developers weigh their options and buyers bide their time.

The two parties could have a standoff for a little while, predicts DTZ executive director (consulting) Ong Choon Fah. 'There's no great push factor to launch projects in June when you weigh the pros and cons. Potential buyers may also hold back purchases as they may not sense a great urgency to buy.'

Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'Developers will try their best to maintain prices; so what if they delay launches for a couple of months? After all, most of them have strong balance sheets and the Singapore economy seems to be continuing to perform well.'

Market watchers were not alarmed by the steep drop in May developer sales. For one, the 1,533-unit average monthly sales figure for the first five months of 2010 is above the 1,224 unit average monthly sales volume for the whole of 2009, which was a boom year, observes CB Richard Ellis executive director (residential) Joseph Tan.

Jones Lang LaSalle's South-east Asia and Singapore research head Chua Yang Liang also points out that 'compared with the collapse of Lehman Brothers in Q3 2008, the impact of the eurozone debt crisis on the Singapore residential market has been less destabilising thus far.'

During the dark days between September 2008 and January 2009, developers sold only between 108 and 376 units per month.

Some property consultants are predicting this month's sales will be under 1,000 units. Including the latest May number, developers have sold 7,666 units in the first five months of 2010.

Even assuming slower sales in June and the second half, consultants predict developers will end 2010 with total sales of 12,000-15,000 units. Primary market sales for the whole of 2009 totalled 14,688 private homes.

Developers launched 1,134 private homes in May, down from 2,085 units in April.

A confluence of factors - the June school holidays, the World Cup, the brewing economic crisis in Europe, and the onset of the Hungry Ghosts Month in August - may cause developers to go a bit slower on property launches in the near future, some property consultants suggest.

Also, potential buyers may not see great urgency to commit as the bumper Government Land Sales Programme for the second half of this year means they will have a greater choice of projects to consider in the near future.

'Over the next couple of months, sales could be around 900-1,300 units per month until more positive signs appear to entice buyers back into the market. It also depends on the projects that will be launched and their pricing levels. Already, there's resistance to high prices, particularly in the suburban areas,' says DTZ South-east Asia research head Chua Chor Hoon.

Colliers International analysis also showed buyers' resistance towards higher-priced units continuing in May. The proportion of units priced above $1,000 psf has fallen from 69.2 per cent of developers' sales in March to 66.1 per cent in April and 55.5 per cent in May.

The firm's director Tay Huey Ying also noted that the most expensive transaction in May at $3,641 psf for a unit at Orchard View is significantly lower than the most expensive primary market transaction in April at $4,207 psf for a unit at The Orchard Residences.

For May, the Rest of the Central Region made up the bulk or 41.8 per cent of homes sold by developers. This was contributed by projects such as the newly-launched Casa Aerata at Lorong 26 Geylang, The Cascadia in Bukit Timah Road as well as continued sales in projects released earlier such as Waterbank at Dakota (52 units) and The Interlace (44 units).

Last month's top seller was Kheng Leong's The Minton in Hougang with 204 units sold at a median price of $849 psf, followed by Casa Aerata with all 78 units sold in the project, comprising mostly one- and two-bedroom units, at a median price of $939 psf, observed CB Richard Ellis executive director Joseph Tan. The Cascadia saw 72 units transacted in the primary market at $1,464 psf median price.

Waterbank at Dakota and Tree House in Chestnut Avenue, which were launched in April, saw sales of 52 units each at median prices of $1,092 psf and $831 psf respectively.

BT's count showed that a total of over 50 units were returned to developers in May.

DTZ's Mrs Ong says that even as developers hold off launches in June, they will watch the market very carefully especially bids at upcoming state land tenders.

'If winning bids ease, developers will have pricing flexibility for their end unit prices. If land prices remain buoyant or even surge further, developers may think they have some respite from pressure to moderate their prices,' she added.

[Wild Falcon]

'Over the next couple of months, sales could be around 900-1,300 units per month until more positive signs appear to entice buyers back into the market. It also depends on the projects that will be launched and their pricing levels. Already, there's resistance to high prices, particularly in the suburban areas,' says DTZ South-east Asia research head Chua Chor Hoon.

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This Chua Chor Hoon is quite funny. Has he or she not "analysed" and found out those condos with <50% sold are mostly in the "prime" areas? So only suburban condos are facing resistance and no resistance to prime prices? Sometimes I wonder all these "research head" are doing. Nothing of substance comes out of their mouth. Just benchmark to Hong Kong price (which are not real prices because those benchmark prices got cancelled) - and ask people to buy prime properties. Ask them to do some REAL research before speaking like property agents.

[mr funny]

http://www.straitstimes.com/PrimeNew...sunwMethod=GET

Jun 16, 2010

Sales of new private homes cool down

But prices are holding and sales figures are still considered healthy

By Joyce Teo


THE triple whammy of a jittery stock market, the euro debt crisis and high prices put the brakes on the private home market last month.

New sales hit 1,078 units - about half of April's near-record 2,208 units and the lowest monthly level seen this year.

But prices have held up from April and the sales numbers, while substantially down, are considered a good showing.

Analysts believe the market is now in a holding pattern, with developers ready to increase the pace of launches once demand picks up again, perhaps after the school holidays, World Cup and an uptick in Europe's fortunes.

What has changed, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak, is that 'the exuberance is giving way to a more rational buying pattern'.

Last month's figures brought total sales in the first five months of the year to 7,666 units, already more than half the 14,688 units sold in last year's hot market. The record was set in 2007 with 14,811 units sold. Developers launched 1,134 units last month, down from 2,085 in April, according to Urban Redevelopment Authority data yesterday.

Colliers International research and advisory director Tay Huey Ying said the healthy level of launches and sales despite global uncertainties show the strength of underlying demand.

Still, buyer resistance towards higher-priced units continued into last month from April, she said. Nearly 80 per cent of non-landed private residential sales last month were priced at $1,500 per sq ft (psf) and below, she noted.

Not surprisingly, the high-end sector was quiet last month, with only 179 units sold, the lowest level this year.

Mid-tier projects on the city fringes garnered the highest sales last month, but the top seller was a mass market project, the 1,145-unit The Minton in Hougang. This new launch sold 204 units at a median price of $849 psf. Other projects all had sales of below 100 units each.

Casa Aerata in Geylang - which had mostly one- and two-bedders from just 388 sq ft to 603 sq ft - sold all 78 units at a median price of $939 psf.

Another suburban launch last month, the 393-unit Flamingo Valley in Siglap Road, sold 46 units at a median price of $1,259 psf. The 536-unit The Cascadia in Bukit Timah Road sold 72 units at a median price of $1,464 psf.

This month will be quieter than last month, with sales tipped to reach 650 to 800 units as buyers turn their attention to the World Cup and the problems in Europe. Other prospective buyers may be overseas for the school holidays.

That will prompt developers to stay selective in their project launches, releasing units in smaller batches, said Ms Tay.

But the slowdown is likely to be temporary, according to Knight Frank chairman Tan Tiong Cheng. 'The property market is holding well. July sales would be a better indication of the market as everybody is taking a breather now,' he said.

CB Richard Ellis executive director, residential, Mr Joseph Tan, said last month's prices have more or less been maintained at April levels and are expected to hold up this month. Knight Frank's Mr Tan also sees stable values ahead, adding that developers are unlikely to push for higher prices in new launches due to the substantial amount of impending land sales.

The Government will be releasing a record amount of land in the second half of this year. Most experts expect new home sales to hit 12,000 to 14,000 units for the year.

[email protected]

[Regulators]

With ridiculous pricing like The Sound, Hillvista, Cascadia, Suites@dunearn, and a whole lot more, don't you think it is time for buyers to start smartening up? if buyers can just band together and put a hold on property buying for the next quarter, i do not think developers will be flexing their muscles like they are doing now...

'Over the next couple of months, sales could be around 900-1,300 units per month until more positive signs appear to entice buyers back into the market. It also depends on the projects that will be launched and their pricing levels. Already, there's resistance to high prices, particularly in the suburban areas,' says DTZ South-east Asia research head Chua Chor Hoon.

======
This Chua Chor Hoon is quite funny. Has he or she not "analysed" and found out those condos with <50% sold are mostly in the "prime" areas? So only suburban condos are facing resistance and no resistance to prime prices? Sometimes I wonder all these "research head" are doing. Nothing of substance comes out of their mouth. Just benchmark to Hong Kong price (which are not real prices because those benchmark prices got cancelled) - and ask people to buy prime properties. Ask them to do some REAL research before speaking like property agents.

[devilplate]

With ridiculous pricing like The Sound, Hillvista, Cascadia, Suites@dunearn, and a whole lot more, don't you think it is time for buyers to start smartening up? if buyers can just band together and put a hold on property buying for the next quarter, i do not think developers will be flexing their muscles like they are doing now...

visited 3 of them except hillvista

ya loh, very ridiculous pricing...perhaps next cycle to breakeven

suites de laurel not too bad...psf abit high but quantum low

the scala, waterline coming up...can kill some of my time oredi

[bargain hunter]

ANALysed...already...thinking from backside. these consultants trying to push their theories that prime has lagged in the price rise so should catch up mah. aiyah, prime properties higher $ quantum, able to move = more commissions so of course keep trying to push prime lah!

'Over the next couple of months, sales could be around 900-1,300 units per month until more positive signs appear to entice buyers back into the market. It also depends on the projects that will be launched and their pricing levels. Already, there's resistance to high prices, particularly in the suburban areas,' says DTZ South-east Asia research head Chua Chor Hoon.

======
This Chua Chor Hoon is quite funny. Has he or she not "analysed" and found out those condos with <50% sold are mostly in the "prime" areas? So only suburban condos are facing resistance and no resistance to prime prices? Sometimes I wonder all these "research head" are doing. Nothing of substance comes out of their mouth. Just benchmark to Hong Kong price (which are not real prices because those benchmark prices got cancelled) - and ask people to buy prime properties. Ask them to do some REAL research before speaking like property agents.

[Regulators]

never underestimate property agents, they can move the market by blabbing nonsense to the thousands of potential buyers under them. i know agents who can tell you Geylang will become as prime as Orchard and they say that without blinking.

ANALysed...already...thinking from backside. these consultants trying to push their theories that prime has lagged in the price rise so should catch up mah. aiyah, prime properties higher $ quantum, able to move = more commissions so of course keep trying to push prime lah!