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News Release

Singapore

Jones Lang LaSalle’s Perspective: Urban Redevelopment Authority Private Residential Property Transactions for December 2009

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

 
CCR
OCR
RCR
Total
Dec-07
175
72
58
305
Dec-08
64
34
33
131
Oct-09
311
255
249
815
Nov-09
363
159
79
601
Dec-09
218
113
150
481

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

 
CCR
OCR
RCR
Total
Dec-07
71%
89%
49%
68%
Dec-08
914%
92%
29%
83%
Oct-09
92%
134%
623%
143%
Nov-09
54%
80%
146%
65%
Dec-09
173%
55%
37%
66%

Source: URA/ Jones Lang LaSalle Research

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

Total
4Q07

88%

4Q08

62%

1Q09
126%
2Q09
121%
3Q09
97%
4Q09
85%

Source: URA/ Jones Lang LaSalle Research

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.”

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.