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New private home sales nearly double in May

The improved sales volume came as developers launched 1,790 new units in May, nearly three times more than the 600 homes in the previous month.

SINGAPORE: The private residential property market sprang to life in May after months of remaining in the doldrums, with developers’ sales surging 96 per cent as buyers snapped up units at the slew of new launches last month.

Developers sold 1,470 new private homes last month, nearly doubling the 749 units that they moved in April, latest data by the Urban Redevelopment Authority (URA) showed on Monday (June 16). Including executive condominiums (ECs), new developer sales rose to 1,528 units in May from 797 units in April.

The number of new private homes sold last month is the highest monthly figure since the Total Debt Servicing Ratio was introduced in June last year. The improved sales volume also came as developers launched 1,790 new units into the market in May, nearly three times more than the 600 homes recorded in the previous month.

"It is a function of supply, and supply that was with good attributes and good locations, as well as projects that were priced very attractively," Mr Desmond Sim, the Head of CBRE Research Singapore said of the rise.

Coco Palms at Pasir Ris Grove and Commonwealth Towers at Commonwealth Avenue topped the best-selling list for the month. Coco Palms moved 590 of the 600 condominium units launched at a median price of S$1,018 per square foot (psf), while Commonwealth Towers sold 275 of 400 homes at S$1,626 psf.

Analysts note the higher sales volume last month is a sign that underlying demand is strong, but some say it may be too early to rejoice.

"The statistics in May do show that buyers did come back (to the market), but that is after five months of drought, of very low sales," said Mr Nicholas Mak, the Executive Director of Research and Consultancy at SLP International Property Consultants.

"In May, we actually saw a surge in the number of units launched. Developers launched roughly about three times more private home units in May compared to April. But the take-up rate only doubled. It actually shows that the private home market is still fairly soft," Mr Mak said.

Observers say attractive prices will continue to be the key consideration for buyers against the backdrop of existing cooling measures.

For instance, the 100 units sold last month at The Panorama at Ang Mo Kio were transacted at a median price of $1,241 psf. This is about eight per cent lower than what units were going for at the project's launch in January this year.

Another project in the vicinity also achieved similar results after it slashed prices. Developers of The Sky Habitat in Bishan trimmed prices by some 13 percent when the project was re-launched last month. It then sold 130 units at a median price of $1,377 per square foot.

"Projects like Panorama and Sky Habitat, they have turned in very good numbers after they have relaunched at better pricings. With the success of this, I am not surprised that developers out there will consider that as an option to move units," said Mr Sim.

For the whole of 2014, analysts expect developers to sell about 9,500 to about 12,000 units. That is about 20 per cent shy of some 15,000 units sold in 2013.
 

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