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Take-up rate maintains for two consecutive months at 66%
SINGAPORE, 15 January 2010 – As expected the monthly new sales volume has contracted a further 20% m-o-m to 481 units. This is the first time that sales volume has contracted for five consecutive months since the series started in 2007.
It is also the lowest monthly sales volume achieved since January 2009 when only 108 units were sold. However, the December 2009 transaction volume is still 58% higher than the corresponding month in 2007. (See Table 1)
Table 1: Total islandwide units (landed + non-landed) sold
In terms of full year total, the transaction volume for new sales (as provided by developers) in 2009 is estimated to be 14,991 units. This has surpassed the historical peak of 14,811 units in 2007. While this may suggest further government intervention is necessary, an examination into the demand (take-up rate) suggests otherwise.
Islandwide, the take-up rate (percentage of new launches that are sold) has remained at about 66% for two consecutive months compared to a historical high of 168% in August 2008, suggesting that the government’s recent announcement on anti-speculative measures has had some effect on demand.
Table2: Total Islandwide Take up Rate
The impact of the announcement is probably most felt in the Rest of Central Region (RCR) and Outside Central Region (OCR) where take-up rates have fallen to 37% and 55% respectively. With the abolishment of the interest absorption scheme, buyers are now more cautious about committing to purchases, resulting in lower sales volume in the mass market.
Core Central Region (CCR), on the other hand, has bucked the trend by registering over 100% take-up this month. Urban Suites sold all of its 59 units which were launched at a median price of $2,521 per sq ft. This project contributed to over 28% of total sales in the CCR.
On a quarterly basis, the islandwide take-up in 4Q09 has eased back to a more moderate 85% from a high of 126% in 1Q09.
Table 3: Quarterly Islandwide Take up Trend
Dr Chua Yang Liang, Head of Research South East Asia, commented “ Although total islandwide monthly sales volume is still higher compared to the same period in 2007, the market demand, especially in the mass market, has moved down to a more sustainable level. As such we do not expect any further government measures in the immediate to short term unless transaction volume and prices begin to move out of pace with the larger economic recovery again.”
Chua Yang Liang
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