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SINGAPORE, 15 May 2009 – The recent hype of affordable prices and good sales for several new launches continue to spillover into April. Supply and demand for all property types rose by 8% and 3% m-o-m, respectively. This is equivalent to a total of 1,083 units launched and 1,207 units sold with islandwide take up rate reaching 117% – the second consecutive month of islandwide take up exceeding 100%. This is also the second consecutive month which CCR shown increased activities in contrast to OCR. OCR seems to be moving in the opposite direction – launches and take up have been declining marginally for two consecutive months.
Table 1: Total Units Sold (Landed + Non Landed)
Table 2: Total Units Launched (Landed + Non Landed)
With good sales recorded over the past few months, developers are hoping to ride on this positive wave. This explains the increased of 30% m-o-m to 1,070 units for non landed housing in April. Though OCR injects the largest supply than other regions, it has declined by 16% as compared to the previous month to 528 units. In contrast, developers released some 329 units in the CCR - a 370% m-o-m growth. This surge in supply in CCR is also the highest since July 2007 when supply surpassed the 300 units mark.
The major launches in CCR include Illuminaire On Devonshire by EL Development (Devonshire) Pte Ltd with 72 units launched, and The Lincoln Residences by Sim Lian (Newton) Pte Ltd with 96 units released. Another better performing project – Verdue , a mixed landed and non-landed development at Holland Road by Bukit Sembawang, recorded 64 units sold out of the 75 units launched.
Jacqueline Wong, Head of Residential at Jones Lang LaSalle expresses “Buying appetite is returning for new developments that are reasonably priced. For example, Verdure by Bukit Sembawang on Holland Road with a median price of $1,416 psf, roughly translates to below $2 million for a home in Holland Road.” The surge in demand can also be attributed to the lack of new supply since December 2008.
Projects that are well received in this month include Illuminaire On Devonshire and Bellerive, which are fully sold, Verdure with 85% sold and RV suites sold 35 units from its previous unsold stock. This recent trend suggests that developers may be shifting their focus towards the CCR in view of a growing interest over the past three months.
Nonetheless, cautious optimism is called for in this market. Dr Chua Yang Liang, Head of Research, South East Asia at Jones Lang LaSalle reckons “Buyers sentiments are more positive now than they were six months ago. Buyers who had held back their purchases for a good four to six months since the Lehman Brother issue back in September 2008 are now returning. Despite the good showing over the recent past months, we believe there is still sufficient pent up demand to last us a few more months. This potential pent up demand may continue through next month if the prices remain affordable and attractive loan packages give buyers a further push to purchase during this period. However, until there is clear signal of a stabilization and underlying positive growth in the real economy, the residual pent up demand alone cannot be expected to lift the residential market in the long term.”
Chua Yang Liang
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