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Sales volume, launches drop by half in H1 2014

Posted on 17 Jul 2014 | Comments Off

4,476 homes were sold in the first six months of 2014, less than half the sales recorded in the first half of 2013, according to CBRE.

“The drop in sales in the first half of the year is mainly the result of the fall in the number of launches. The number of units launched in the first half of 2014 totalled 4,807, which is about half of the 9,941 units launched in the first half of 2013,” said Joseph Tan, Executive Director at Residential, CBRE.

While the units sold in the H1 2014 is lower, it still reflects a strong take-up rate of 93 per cent, he added.

According to Colliers International, launch and sales volumes declined year-on-year respectively by 76.4 percent and 73.3 percent from the 1,768 units launched and 1,806 units sold in June 2013, before the Total Debt Servicing Ratio (TDSR) was announced.

“The sales tally of 482 units in June 2014 is the lowest registered for the month of June since primary market sales data was made available from June 2007,” said Chia Siew Chuin, Director of Research & Advisory at Colliers International.

She expects launch activity to pick up slightly as the traditional lull period is over,

However, with fewer affordably-priced mass-market projects in the pipeline, buying volume is not expected to improve extensively. Colliers International predicts primary market sales volume remain to the region of 400 to 700 units in July.

For the second half 2014, location and the pricing will be the most important factors in determining home sales volumes. CBRE expects buyers to remain selective and take a longer time to make their purchase.

Tan said, “Based on the projects that will be coming on-stream, we anticipate that underlying demand, coupled with competitive pricing, should ring in total new sales of between 8,000-9000 units for the whole of 2014.”

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Posted in Loan / Mortgage / Finance, New Launches, Property Market / Real Estate

Tagged New Launch, Singapore residential properties, TDSR, Total Debt Servicing Ratio

Buyers gunning for homes costing up to $1.2 mil

Posted on 17 Jul 2014 | Comments Off

Buyers now prefer new private houses with a total price tag of up to $1.2 million rather than pricier units, due to the introduction of the total debt servicing ratio (TDSR) framework in June 2013.

In the past 12 months, sales of private homes sharply declined for units costing more than $1.2 million, according to media reports.

In fact, there were 854 transactions for houses priced from $1 million to $1.1 million, and 764 for units selling for between $1.1 million to $1.2 million. That figure falls to 618 in the $1.2 million to $1.3 million price range, and plummets to 411 units in the $1.3 million to $1.4 million category.

Overall, apartments costing between $700,000 and $1.2 million made up 49 percent of the 8,254 units sold from July 2013 to June 2014.

But before the TDSR was implemented from July 2012 to June 2013, sales only fell sharply after the $1.4 million mark. There were 1,062 deals in the $1.3 million to $1.4 million price bracket, and only 656 homes were sold in $1.4 million to $1.5 million price range.

“Projects with units that are priced within the affordable range of $800,000 to $1.2 million still perform well,” said Dr Chua Yang Liang, JLL’s Research Head for Southeast Asia.

Buyers now go for cheaper and smaller units like one or two-bedroom apartments because of the TDSR. Although these condos usually have a lower absolute price, their psf price is sometimes a bit higher than larger apartments.

These smaller units are also more popular thanks to their dual purpose; for investment or owner’s accommodation, noted R’ST Research Director Ong Kah Seng.

“It is also easier to rent out a small apartment than a typical three-bedroom one that requires more tenants to get together to co-rent,” he added.