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News Release

Singapore

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

Transaction volume lowest since January 2009 at 600 units


SINGAPORE, 15 December 2009 – On the back of the seasonal slowdown and the government’s anti-speculative measures, the overall monthly sales volume in the private residential market has expectedly quelled further by 26% m-o-m to 600 units.  Significantly, this is the fourth consecutive monthly contraction since its peak in July 09, it is also the lowest sales volume achieved since January 09 when 108 units were sold.

On the contrary, this sales volume is still some 211% higher as compared to the 193 units sold a year ago, when the economic crisis was unfolding. 

Table 1: Total islandwide units (landed + non-landed) sold
CCR
OCR
RCR
Total
Nov-08
63
102
28
193
Sep-09
152
560
431
1,143
Oct-09
311
255
249
815
Nov-09
362
159
79
600
Source: URA/ Jones Lang LaSalle Research
 
When compared according to submarkets, Core Central Region (CCR) continued to lead the market by recording 362 units or 60.3% of total transactions.  Outside Core Central Region (OCR) only recorded 159 transactions (26.5%) while Rest of Central Region (RCR) saw only 79 transactions (13.2%) in the month of November.

In the non-landed sales market (where the bulk of the sales is transacted), only CCR has shown a positive growth in demand at 20% m-o-m. Two projects with strong take-up in CCR include – the newly launched Marina Bay Suites which sold 87 units out of 90 units launched at a median price of $2,159 psf, and Parvis which sold 103 units out of 130 units launched at a median price of $1,507 psf. Strong buying sentiment in this submarket is mainly supported by affordable prices as compared to the previous peak in 2007, especially developments with good specifications and prime strategic locations.

On contrary, both OCR and RCR witnessed contraction in total volume sold. In this month, RCR registered the largest decline of 68% m-o-m, followed by OCR which saw decline of 55% m-o-m.

This data suggests that the impact of the anti-speculative measures was felt most in the OCR and RCR as these markets are driven mostly by HDB upgraders who are more sentiment driven and price cautious.

Jones Lang LaSalle’s in-house data also reflected a similar growth pattern in the average capital value for prime properties (within CCR). Despite registering the highest submarket price growth of 11% q-o-q, it is still some 16% away from the previous peak recorded in 2007.
 
Comparatively, the average resale price in non-prime market (within OCR and RCR) grew at a smaller rate at 5% q-o-q and is almost reaching the 2007 level in 4Q09.
 
Table 2: Total islandwide units (landed + non-landed) launched
CCR
OCR
RCR
Total
Nov-08
200
99
83
382
Sep-09
203
579
631
1,143
Oct-09
339
191
40
570
Nov-09
671
198
54
923
Source: URA/ Jones Lang LaSalle Research
 
On the supply side, new launches have witnessed an increase of 62% (923 units) from the 570 units launched in October 2009. All submarkets witnessed an increase in new supply with CCR recording close to 100% growth. This is driven mainly by the launch of 232 units from Espada by Novelty Group (St. Thomas Walk), 130 units from Parvis by joint venture Ho Bee Group and MCL Land (Holland Hill) at and 124 units from Cyan by Far East Organization (Bukit Timah Road/Keng Chin Road).

In terms of take up rates, CCR recorded a level at only 54%, suggesting that developers may have been too optimistic marketing their launches in November. Alternatively, despite a poor showing of actual units sold in RCR, this submarket recorded take up rate of 146%.

As take up rate is used as an indicator to measure the level of unsold units left in the month and the “pendulum” effect has returned more significantly since June 2009 where take up rate surpassed 100% in alternate months. This pendulum will likely to continue swinging during the short term as developers continue to find their supply and demand balance.
Table 3: Take Up Rate
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
110% 96% 113% 83% 153% 65%
Source: URA/ Jones Lang LaSalle Research

Dr Chua Yang Liang, Head of Research South East Asia says “the mass market is cooling off to the government’s recent persuasive announcement. If the OCR and RCR market remains at the moderate level, no further measures are necessarily. On a different note, the activity in CCR is likely to maintain given the overall improvement in the regional economic conditions. We think the market is likely to remain cautious going forward into Feb 2010 where we may see a return of buying interest again.”
 
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 (i.e. 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.
  • Take up rate: Number of units sold over number of units launched. Number of units sold in that month can surpassed the units launched as some buyers are buying unsold units released in the previous months.