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News Release

Singapore

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

Transaction volume peaked in June 2009


Singapore, 15 June 2009 – Euphoria in the private residential market drove islandwide transaction volume to a new record of 1,825 units in June. This is 6% higher than the last peak in Aug 2007 (1,723 units) when the series was started in June 2007. Sales volume has been increasing gradually since April 09, expanding at 9.1% m-o-m in June 2009. On a y-o-y comparison, this is equivalent to an improvement of 127.8% (sales in June 2008 was 801 units). Most of the sales came from RCR at 867 units.

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

 
CCR
OCR
RCR
Total
Jun-08
165
181
455
801

Apr-09

322
528
366
1216

May-09

618
443
612
1673
Jun-09
526
432
867
1825

Source: URA

Capitalizing on this bullish sentiment, developers increased supply by 40.9% m-o-m to 1,637 units in June 2009. The bulk of supply came from RCR where 780 units were launched.

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

 
CCR
OCR
RCR
Total
Jun-08
221
236
612
1069

Apr-09

339
448
298
1085

May-09

399
403
360
1162
Jun-09
399
458
780
1637

Source: URA

Looking at non-landed market, sales in RCR was reported to be highest in quantum as compared to the other two regions at 864 units. The CCR and OCR regions were reported to have 506 units and 406 being sold respectively. RCR is also the only region which recorded an increase in sales at 42.3% m-o-m whereas CCR and OCR saw a decline of 9.8% m-o-m and 0.7% m-o-m respectively.

This startling increase in the RCR however has been skewed by the newly launched 8 @ Woodleigh by Frasers Centrepoint where all 330 units were sold at median price of $804 psf. Strong driving factors such as affordable total quantum (reportedly between $370,000- $750,000) and close proximity to public transport (NEL line Potong Pasir and Woodleigh stations, the latter is non-operational at this time) continue to attract buyers, particularly HDB upgraders.

According to our analyses, the price gap between non-prime residential projects and HDB resale flats has come off from the peak of 67% in 2007 to a low of 54% in 2009. This is similar to that achieved in 2004. “In our opinion, the narrower price gap is a major factor behind the bullish sentiment especially amongst HDB upgraders. As long as this gap remains tight, this stream of HDB upgraders into the private residential market is likely to continue.” says Dr Chua Yang Liang, Head of Research, South East Asia and Singapore.

RCR projects in the $1,100 to $1,200 psf range also recorded strong demand as reflected in Vista Residences where 87 units out of 182 units launched were sold and Parc Seabreeze where 51 units out of 94 units launched were taken up. Two transactions have surpassed the $3,000 psf mark. These were Nassim Park Residences ($3,813 psf) and The Ritz-Carlton Residences Singapore Cairnhill ($3,404 psf). Several projects that were also well received include One Devonshire by Allgreen Properties where 96% of 152 units were sold at a median price of $1,771 psf and Miro by Far East Organization where all 30 units launched were sold at a median price of $1,436 psf.

Despite weak economic fundamentals, the private residential market continue to buckle the trend. Jones Lang LaSalle’s Head of Residential, Ms Jacqueline Wong notes, “The overall sentiment has improved over the past months and we are beginning to see a return of interest from foreign buyers seeking opportunistic buys. We have also witnessed increased requests to source for properties in prime areas from buyers in India, Hong Kong, Indonesia and Europe."