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Second highest monthly transaction volume since June 2007
SINGAPORE, 15 June 2009 – On the back of the recent “euphoria” of the residential market, demand and sentiments continued to improve in May 2009. The total transaction volume of 1,668 units is recorded to be only 3.2% shy from the historical high in Aug 2007 at 1,723 units. Following two declines in sales volume in March and April, the market seems to rebound in May by showing a 38% mom increase from April. Buying sentiments also improved tremendously from a year ago in May where sales were only 453 units, or approximately one third of the May 2009 sales. At the same time, most of the sales take-up has been from projects already launched in the developer’s inventories.
Table 1: Total islandwide units sold:
1723 (exclude ECs)
Supply has only increased by 7% to 1,161 units in May 2009. The biggest supply made available was in OCR where 402 units were launched.
Table 2: Total islandwide units launched:
Following a 5-month break, sales in CCR returned to be reported as highest in quantum as compared to other two regions at 617 units. The RCR and OCR regions were reported to have 609 units and 442 being sold respectively. Despite being in the midst of economic downturn, CCR’s May 2009 performance has outshone the Aug 2007 performance (where property market was peaking) by 6%. Comparing with April 2009, CCR sales increased by 92%.
Continued interest to the luxury properties are observed to be trickling back in this month. These projects include Orchard Residences where units were bought at median price of $3,043 per sq ft, St Regis Residences at $2,200 per sq ft and Boulevard Vue at $2,600 per sq ft.
Discounted pricing from the developers are bringing the buyers back. This is evident in the recent projects which are well-taken in CCR non-landed market. These include projects such as Martin Place Residences (186 units sold out of 170 units launched), The Wharf Residence (140 units sold out of 93 units launched) and Parc Centennial (all 44 units launched were sold). For instance, Martin Place Residences by FCL Land Pte Ltd was sold in January 2008 (period where they first launched) at median price range between $1,746 per sq ft to current median price at $1,423 per sq ft (estimating 18% declined), The Wharf Residence which was sold at median price between $1,506 per sq ft in July 2008 to current $1,190 per sq ft (estimating 21% dropped) and Parc Centennial was initially sold for $1,463 per sq ft in April 2008 and the current median price is $1,176 per sq ft (a decline by 19.6%).
Demand for landed housing in CCR has also done pretty well in the same month. Some 57 units were bought and this is the second highest sales volume since September 2007 where 157 units were bought then. An example is Watten Residences by Simefield Pte Ltd which manage to sell 35 units of its unsold stock at median price of $797 per sq ft.
The positive hype of good sales has also spillover to RCR where 609 units were sold with project such as The Arte (98 units sold out of 136 units launched) and The Mezzo (89 units sold out of 97 units launched) well taken in this month.
In terms of take up rate, RCR has also seen the highest at 169% as compared to the other two – CCR (155%) and OCR (110%).These high take up rates for this month may suggest that buyers are still absorbing unsold stock which are accumulated over the past few months as prices were deemed to price above buyer’s threshold. At the same time, developers may remain cautiously optimistic of the market where they are expected to continue releasing what is left in their respective inventories, especially those in the mid range.
Desmond Sim, Associate Director of Research at Jones Lang LaSalle says, “The recent rise in property market activity remains confined within the residential market. This, in our regards, is largely fuelled by softer prices and strong latent demand which alone will not be sufficient to sustain an overall recovery in the market. Unless there are improvements in overall economy, it may still take quite some time before we see the return of “super-luxury launches” which may fetch an average $5,000 per sq ft during its heydays as affordability still remain the main factor to entice buyers.”
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