Executive condominium sales spiked in November: URA

Sales of executive condominiums (ECs) rose sharply in November even as other transactions in other forms of private property slowed, according to Urban Redevelopment Authority (URA) data released on Monday (Dec 15).

A total of 1,758 ECs were launched last month, with 855 units sold. This marked a significant turnaround from October, when 90 ECs were sold with no new units launched.

EC projects were also bestsellers in November. Topping the list was Lake Life EC in Jurong. Its developer sold 533 of the total 546 units at a median price of S$869 per square foot (psf). Lake Life is the first EC project in Jurong in 17 years.

Buyers also picked up units from other new EC developments. Bellewaters in Sengkang saw 170 units sold – at a median price of S$813 psf. The same developer cleared 79 units at Bellewoods in Woodlands at a median price of S$800 psf.

Property observers said the brisk EC sales are expected due to a pent-up demand in the market following a halt in new launches recently.

Ms Chia Siew Chuin, director of research and advisory at Colliers’ International, said: “It is also an indication of buyers’ price sensitivity amid a tightened credit environment, as eligible homebuyers deciding between private homes and ECs may go for the latter due to the relatively lower price quantum and housing grants available for the public-private housing hybrid.”

Excluding ECs, developers sold 412 new units in November, down from the 785 units sold in October. This is despite an increase in the number of units launched – 859 units compared with the 676 units launched in October.

Mr Alan Cheong, senior director of research and consultancy at Savills Singapore, said: “The increase was mainly due to the sale of ECs. But without the ECs, the sales number for pure private properties actually fell to the lowest for 2014 – at 412 units.”

Only two new private condominium developments – 493-unit Sophia Hills located at Mount Sophia and the 250-unit TRE Residences in Geylang – were launched in November. Altogether, the two projects saw just 61 units being sold.

Looking ahead, property watchers said developers are unlikely to offer discounts on projects due to the high cost of land they paid for.

“Over the next few months, a lot of the projects that will come on stream would have been derived from Government Land Sales (GLS) sites in the second half of 2013 and the first half of 2014. On average, although prices would have come off, there are pockets where the GLS sites went to the highest bidder at a relatively high price, which means that developers may not have much room to lower prices,” said Mr Cheong.

But developers may turn to other strategies to keep properties affordable for buyers. Mr Lim Yong Hock, key executive officer of PropNex Realty, said: “One of the ways is to actually trim the sizes of the units, so that the quantum can be much more affordable. Some of the sizes could even range from 300 over square feet upwards. And that could come up to a very affordable pricing of below S$500,000.”

As the year draws to a close, observers expect December to be a quiet month, due to the year-end festive and holiday period. Overall, property experts said 2014 is likely to end with less than 8,000 units sold – about half the number (14,948) sold in 2013.

Source : Channel NewsAsia – 15 Dec 2014

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