Strong demand for private homes with 2,207 units sold in April 2010

Private home sales breached the 2,000-unit mark for the first time in nine months since July 2009.

Figures from the Urban Redevelopment Authority (URA) show that 2,207 units were sold in April on the back of positive sentiment and resilient demand.

While the transaction volume exceeded market expectations, analysts said it is unlikely to be sustainable.

Private home sales in April were also 25.3 per cent higher than the 1,761 units sold in March.

In fact, the number of units sold outpaced the number of units launched in April, with only 2,084 units launched last month.

UOL’s Waterbank@Dakota was one of the star performers in April, with 573 units being snapped up at a median price of S$1,178 per square foot.

CapitaLand’s The Interlace saw 144 units sold at a median price of S$1,067 per square foot.

The two projects, along with Tree House’s 374 units accounted for nearly half or 49.4 per cent of the total sales transactions.

The most expensive unit sold last month was The Orchard Residences at Orchard Boulevard which went for S$4,207 per square foot.

Unlike the trend in recent months, luxury projects were not the most popular among buyers, with mid-priced developments taking over the rein.

“In a way, we can look at it as a second ring, second tee-off compared to the core central region. In terms of pricing, certain pockets are still lower than outlying suburban areas like Ang Mo Kio , Bishan. So there is that attractiveness – near to the city, and yet pricing is still quite affordable,” said Chua Yang Liang, head of Research, Southeast Asia, at Jones Lang LaSalle.

Compared to March, home sales in the city fringe jumped 290 per cent with 1,044 units sold last month.

Meanwhile, fewer new homes changed hands in other areas.

392 new homes in the city were sold, down 45 per cent from March, and sales in the mass market segment dipped by 1 per cent to 771 units.

Overall, market players attribute the strong demand to better economic and job prospects.

Some home buyers may also be eager to lock-in their purchases in anticipation of an interest rate hike in the second half of the year.

Despite the positive sentiment, analysts warned that there are uncertainties ahead due to the debt crisis in Europe.

“The last 2 weeks has seen some cooling off. If you were to visit some of the showflats, the attendance has been small,” Colin Tan, director & head of Research & Consultancy at Chesterton Suntec International.

“I think developers recognise this, so when they price their projects, they will have to bear this in mind that they either have to push for sales or push for prices,” he added.

Going forward, analysts project quarterly home prices to grow by 1.5 to 2 per cent.

CBRE said it expects demand of new homes to reach 4,000-4,500 units in the second quarter, similar to the 4,380 new homes sold in the first quarter.

They also expect between 13,000 and 16,000 new homes to be sold for the whole of 2010.

Source : Channel NewsAsia – 17 May 2010

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