Singapore’s new private home sales rise 5.4% in May

New private home sales in Singapore saw a slight rebound in May compared to April, according to figures released by the Urban Redevelopment Authority (URA).

The number of units, excluding executive condominiums, climbed to 1,455 units in May, up 5.4 per cent from April’s 1,380.

Analysts said the uptick was driven largely by investor demand for new homes in the city fringes, as the price gap between these areas and the suburban regions narrows.

The launch of new private home projects in the King Albert Park area and Keppel Bay has stoked home-buyers’ interest in the city fringes.

Sales volume of new private homes there jumped by about 27 per cent, from 473 units in April, to 602 units in May.

Chua Yang Liang, head of research of Southeast Asia at Jones Lang LaSelle, said: “If you look at prices today, mass market versus the outside mass market — meaning your CCR (Core Central Region) and RCR (Rest of Central Region) region — the price band between these two markets have narrowed to an all-time low of about 40 per cent. Historically, it’s about 60 per cent.

“White Haven, Corals at Keppel Bay, as well as KAP Residences — these are what we classify as RCR. These projects are located typically your second ring that’s quite close to the city centre. In terms of price band, they’re fairly affordable compared to the other projects we’ve seen in the market. So the closeness of pricing has attracted some buyers back into the market.”

Chia Siew Chuin, director of research and advisory at Colliers International, said: “KAP Residences, it’s an integrated development and it’s a proven formula with regards to popularity.

“We also see Whitehaven in Pasir Panjang. This is a freehold development in Singapore and again, it’s very rare to find freehold developments in the suburb of Singapore.

“All these developments have their own attributes, so they’re very attractive to buyers during the launch.”

Still, mass market homes remained popular with home buyers.

D’Nest and new project Stratum condominium in Pasir Ris were two of the top ten selling projects in May, according to OrangeTee.

According to the URA, the take-up rate for new homes in the suburbs remained stable at 728 units in May compared to April’s 729 units.

Meanwhile, sales of new private homes in the city area dropped to 125 units in May, compared to 178 units in the previous month. Analysts said this was due to a curtailed demand from foreigners, who had been hit by the latest round of cooling measures.

Ms Chia said: “It would probably be better for developers to launch earlier rather than later due to the renewed concerns about the recovery of the global economic situation, notwithstanding the fact that developers will still continue to garner some level of support from first-time home buyers and HDB flat upgraders.

“The knock-off effects from the cooling measures and reduced affordability as a result would put people on a more cautionary mode. Taking all that into consideration, we would think that new homes sales will be within a normalised range and that would bring us to about 17,000 to 19,000 units in the whole year.”

Some analysts said the slight increase in new homes sales in May could mean demand for new homes may have stabilised. Going forward, they are expecting prices and sales volumes to remain stable, as investors take a wait-and-see approach, as the global economic uncertainty continues.

Over the next few months, market observers expect sales volume of new private homes to hover in the range of 1,300 to 1,600 units per month.

Source : CNA – 17 Jun 2013

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