Tag Archives: new private home sales

50% rise in new private home sales

Developers sold 648 new private homes last month which translates to an increase of 50 percent month-on-month but 47 percent decline on the same month last year.

Including executive condominiums (ECs), the number of units sold last month was 707.

The month-on-month rise comes from data published by the Urban Redevelopment Authority (URA) this afternoon.

During August, Singapore developers sold 432 new private homes, and up to 490 including ECs, in a month that saw few new launches. In contrast, September last year saw a total of 1,237 units sold, that when including ECs reached 1,649 units.

The development with the highest number of sales in September was Highline Residences in Kim Tian Road with a median average sales price of $1,848 psf.  The highest median priced sale happened at Mon Jervois with one unit being sold at $2,771 psf.

According to URA, prices as well as the number of units sold during the month are based on the Option to Purchase (OTP) issued by developers to buyers and reported to URA. Not all OTPs result in confirmed sales.

An OTP is a right or option given by the vendor to an intending purchaser to buy the property at a specified price within a specified period of time – the validity period of the option. The intending purchaser must pay a booking fee of between 5 – 10 percent of the agreed price for this right or option. The purchaser has to exercise the OTP within its validity period if he decides to buy the property.

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Condos below $1.25mil preferred

The majority of new private home sales in the non-landed segment in H1 2014 were priced below $1.25 million, according to a study by CBRE.

Specifically, properties in this price band accounted for 71.7 percent of the transactions during the said period compared to 63.6 percent for the whole of 2013. Residences within this range also made up the lion’s share of sales since 2007 despite inflation and rising wages.

“Our study of caveats lodged for non-landed new sales from 2007 to H1 2014 showed that 55 to 75 percent of transactions were priced below $1.25 million each. In particular, the most popular price band was from $750,000 to $1 million,” said CBRE Research Head Desmond Sim.

Based on the buyers’ addresses, HDB dwellers made up 52 to 67 percent of the transactions for units sold under $1.25 million since 2008.

“They could be HDB upgraders, or singles and new couples looking for their first homes. The Total Debt Servicing Ratio (TDSR) framework has just closed the lid tighter on liquidity and made it that much harder for HDB upgraders to buy a private property, much less new couples aspiring to join the fray by bypassing the HDB route,” Sim explained.

Additionally, the proportion of HDB occupiers, who bought new private non-landed houses costing less than $1.25 million, reached a record high of 66.7 percent in H1 2014. However, the number of such buyers declined to 1,696 over the period from 1,967 in H2 2013 and 3,385 for H1 2013.

The number of units within this price band that were purchased by those with private addresses also declined to 847 in H1 2014 versus 1,459 and 2,248 in the first and second halves of 2013, respectively.

This implies both groups of buyers were significantly affected by the TDSR, which was imposed in June 2013.