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News Release

Singapore

Jones Lang LaSalle’s Perspective: URA Private Residential Property Transactions for July 2009

Transaction volume highest in July 2009


Singapore, 17 August 2009 – Positive stock market performance over the past few weeks continue to fan the private residential market, driving islandwide transaction volume to a new record of 2,767 units. This is the highest monthly sales volume recorded since the series started in June 2007, breaking last month’s record of 1,825 units by some 51.6%. On a y-o-y comparison, this is an improvement of 206.8% (July 2008 saw only 902 units transacted). Unlike last month where the sales were mainly driven by RCR, OCR is the key driving force in July recording some 1,502 units or over 54% of total transactions.

Table 1: Total islandwide units (landed + non-landed) sold

CCR
OCR
RCR
Total
July-08
83
541
278
902
May-09
618
443
612
1673
June-09
526
432
867
1825
July-09
514
1502
751
2767

Source: URA

Capitalising on the bullish sentiment, developers  increased their supply by 75.8% m-o-m to 2,878 units in July 2009. Similar to sales volume, the total supply for July is also the highest monthly supply since the series started. The bulk of supply came from OCR at 1,856 units.

Table 2: Total islandwide units (landed + non-landed) launched

CCR
OCR
RCR
Total
July-08
131
636
556
1323
May-09
399
403
360
1162
June-09
399
458
780
1637
July-09
483
1856
539
2878

Source: URA

In the non-landed market (where the bulk of the sales is transacted), OCR region saw some 1,403 units transacted while CCR and RCR recorded 496 units and 748 units respectively. OCR is the only region which saw a startling 245.6% m-o-m increase in sales volume whereas CCR and RCR saw a decline of 2% m-o-m and 13.4% m-o-m, respectively. The sharp growth in the OCR was skewed by the big launches such as The Gale by Tripartite Developers Pte Ltd (subsidiary of Hong Leong Holdings) where 294 units were sold at median price of $696 psf, Meadows @ Peirce by UOL Development Pte Ltd sold 286 units at median price of $919 psf. Strong pent up demand for freehold projects in suburban area and affordable total quantum (smaller sized units) are the main driving forces.

For the CCR, after a drought of 11 months, this market was tested with a new project Volari at Balmoral Road by City Developments Ltd. The market responded well by taking up 93% of the 85 units released at a median price of slightly over $2,000 psf. Some other luxury projects sold in July (with more than 1 transaction) are tabulated below. Most of these projects saw an increase in the number of units sold and moderate improvement to the median pricing. As Nassim Park Residences and The Orange Grove had one transaction each in June, price movement comparison is not so relevant.

Projects
July 2009
Price/(no of transactions)
June 2009
Price/(no of transactions)
Nassim Park Residences
(Nassim Park Development Pte Ltd)
$3,273 psf
(4)
$3,813 psf
(1)
Orchard Residences
(joint venture between Sun Hung Kai and CapitaLand)
$2,815 psf
(4)
$2,787 psf
(7)
Hamilton Scotts
(Sardinia Properties Pte Ltd)
$2,792 psf
(10) 
$2,525 psf
(2)
The Orange Grove
(Ho Bee Developments Pte Ltd)
$2,334 psf
(9)
$2,225 psf
(1)

Source: Jones Lang LaSalle

Despite weak economic fundamentals, the private residential market continues to buckle the trend. However in terms of overall islandwide demand, take up rate of all properties has slipped to 96%, a contrast to the over-100% level that typified demand since Feb 09. This suggests that developers might have been too zealous with the overall supply when demand still remains fragile. Jones Lang LaSalle’s Head of Research- Southeast Asia, Dr Chua Yang Liang notes, “Unless we begin to record positive growth in the larger global and domestic economies (which we are seeing to some extent albeit still fragile), the recent spike in demand and prices if prolonged may cause asset driven inflation in the longer term, if wage increases do not keep in pace. While it is not clear if this trend is sustainable, we need to watch how the real economy performs next quarter, especially since the positive economic growth this quarter was driven largely by manufacturing and pharmaceutical output."

 

Explanatory Notes:

  • Core Central Region (CCR): which comprises Postal Districts 9, 10 and 11, the Downtown Core and Sentosa
  • Rest of Central Region (RCR): Rest of Central Region (RCR) which comprises the Central Region outside the CCR
  • Outside Central Region (OCR): Area outside Central Region
  • Landed Housing: Include bungalows, semi-detached and terrace houses
  • Non-Landed Housing: Include apartment/condominium
  • Median price: For landed residential properties (ie detached, semi-detached and terrace houses), the median price per sq m is computed based on their land area. For strata sub-divided properties, such as apartments, condominiums, cluster housing, townhouses, the median price per sq m is computed based on their strata floor area.