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30% slump in private home sales: report

Posted on 18 Oct 2014 | Comments Off

Sales of private homes in Singapore plummeted by over 30 percent in Q3 2014 from the previous quarter to around 2,800 to 2,900 units, according to a DTZ report.

The volume of transactions recorded last quarter is similar to the first three months of the year.

New private home sales were relatively weak in Q3, with developers moving about 1,500 units or 52 percent of all transactions in the period. It was a different story in 2013 whereby primary market sales averaged 65 percent of total sales in each quarter.

A major factor was the lack of any new launches in August coinciding with the Hungry Ghost Festival.

But there were still three major launches in the quarter, with City Gate in July and Highline Residences and 70 Saint Patrick’s in September.

City Gate and Highline Residences reported take-up rates of more than 70 percent and 80 percent of units launched respectively. Meanwhile, the freehold 70 Saint Patrick’s saw more than half of all units sold over the first weekend of its launch, with recently announced plans for the Thomson-East Coast MRT Line contributing to its popularity.

DTZ stated that strong demand for these city-fringe projects came despite the slew of cooling measures and relatively high prices. The average price of 70 Saint Patrick’s was in the range of $1,630 psf, while City Gate averaged over $1,800 psf and Highline Residences averaged $1,900 psf.

“Instead of lowering prices, some developers are finding ways to add more value for buyers. For instance, by providing a variety of personalised services within residences or selling fully-furnished units with upscale interior fittings. These added features are hoped to help sustain sales at certain prices,” said DTZ.

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Posted in Property Market / Real Estate

Tagged 70 Saint Patrick, City Gate, Highline Residences, new private home sales, Private Residential Property, Singapore Residential Property

Potential sellers unlikely to lower price expectations

Posted on 3 Oct 2014 | Comments Off

Prices of private homes in Singapore continue to cool but at a slower pace as shown by Urban Redevelopment Authority (URA)’s flash estimate for Q3 2014.

According to Colliers International’s Director of Research and Advisory Chia Siew Chuin, many sellers are not in any urgent need to dispose their properties as many have already gained from earlier property trades. Some may even be still sitting on paper profits if they made their investments in the earlier up-cycle.

“Many owners of private residential properties today have benefitted from the robust capital appreciation since 2005. Except for the short blip during the global financial crisis, which did not take long to recover, property owners/investors have generally enjoyed more than attractive profits in the last nine years or so,” she said.

As potential sellers expect there is still some time before interest rates increase, and due to their current financial muscle, they are unlikely to lower their price expectations. At the same time, these sellers are likely to time their exit in order to minimise or to avoid paying Seller’s Stamp Duties (SSD).

Additionally, developers have enjoyed the gains in the residential property price run-up from 2005. Chia said, “With the amount of profits made during the boom years, some of them have the financial power to maintain current prices or else offer moderate discounts. Potential buyers are well aware of the current downtrend in prices and they refrain from making purchases now, in expectation of even lower prices in the near term.”

These factors explain this price stalemate in the current market, she said, as reflected in URA’s latest flash estimates.