- POSTED: 16 Dec 2013 14:45
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Demand for new private homes in Singapore jumped 15 per cent in November, led by strong sales from new launches.
SINGAPORE: Demand for new private homes in Singapore jumped 15 per cent in November, led by strong sales from new launches such as Duo Residences in Bugis and Alex Residences at Redhill.
Duo Residences in Bugis was the top selling private development in November. Its developers moved 600 units at a median price of S$1,999 per square foot (psf).
Alex Residences along Alexandra Road in the city fringes also found buyers for 171 units at S$1,706 psf.
Together, the two launches made up more than half of the home sales in November, breaking away from the trend in recent months where new home sales are led by projects located in the suburbs.
According to data from the Urban Redevelopment Authority (URA), 1,228 units of new private homes were sold in November, up from a revised 1,070 units transacted in October.
Among the units sold, 214 are located in the suburban areas, 352 units in the city fringe, and 662 units in the core central region.
“In December, we will definitely see slower sales because it is once again a function of supply. Not many launches are expected in the month of December,” said CBRE Research associate director Desmond Sim.
A traditional lull period, December should see 300 to 500 units sold as only one project in Ang Mo Kio is expected to be launched.
Property consultants said November's data showed that underlying demand for the private housing market is still strong.
Market experts expect developments located near MRT stations and amenities to see good take-up rates. However, loan curbs imposed under the Total Debt Servicing Ratio (TDSR) framework means that buyers may have to pay more on a per square foot basis, as developers are likely to build smaller units to maintain profit margins.
“The sweet spot has to be S$1 million to S$1.5 million. If you price it competitively, people won't mind and that it is affordable for them,” said Mr Sim.
Mohamed Ismail, CEO of PropNex Realty, said buyers have become more selective in their property purchases, with the introduction of the property loan curb.
However, strong sales figures for selected developments over the past month showed that buyers responded positively to developers who had adjusted their pricing strategies.
Two EC projects also performed well in November. Sky Park Residences in November moved 271 units, while Waterwoods in Punggol sold 131 units.
Including sales from executive condominium (EC) projects, 1,714 new units were sold in November, up 55 per cent from October.
Looking ahead to next year, analysts say private home prices should come down from the highs recorded earlier this year as developers calibrate pricing.
“We expect the impact of the URA price index going forward to probably see price moderation next year. Prices are expected to come down by between three and 10 per cent for the whole of next year. We do not expect a significant drop in property prices,” said ERA key executive director Eugene Lim.
A strong pipeline of new projects is expected to be launched in the first quarter of 2014.
But analysts said that to push sales, developers are expected to moderate their pricing to ensure affordability among buyers.