March private property market bounces up
The private property market transacted 1,543 units in March, a significant 25.7% increase from February’s 1,228 units. Out of the units sold, Executive Condominium (EC) units comprised 157 units, or 10.2%. The total number of units sold is the highest so far this year, although it still falls short of half the months in 2010.
“The pent-up demand sustained after the last round of cooling measures on 13 January appears to have been quenched by investors and HDB upgraders alike,” observes PropNex Corporate Communications Manager Mr Adam Tan.
“The high figure is surprising, considering that only two projects sold 100 units or more,” he says, referring to H2O Residences’ 255 units and Questa@Dunman’s 100 units. “Usually months with greater sales are the result of many larger projects launching and selling high numbers of units.” However, he concedes that these two projects certainly helped boost the March sales figure, accounting for about one out of every four units sold in the month.
Sustained Demand From HDB Upgraders
Mr Tan points out that the strong response to the launch of H2O Residences in Sengkang, as well as the 157 EC units sold, indicate a sustained interest in private property by HDB upgraders.
“Including ECs, 798 units, or 51.7% of the total, were sold below the $1,200psf mark,” Mr Tan says. “Consumers are still interested in the mass market properties, but developers may face resistance if the price per square foot is too high, especially in the Outside Central Region (OCR).”
One example he cites is Centro Residences in Ang Mo Kio, which saw three units sold in March for a median price of $1,343psf. 67 of its 250 launched units still remain unsold today, whilst only 45 of H2O Residences’ 300 launched units remain unsold.
“As it is, $1,200psf is now a more realistic benchmark price for a unit in the OCR today, as compared to $1,000psf before.”
Renewed Interest From Investors
“Investors seem to have taken the 13 January cooling measures in stride,” Mr Tan continues, “with a renewed demand in both the mid- and high-end markets. Excluding ECs, the number of units sold in the mid-range market, or $1,200–$2,499psf range, was 670, or 48.3% of the total. The high-end market, with units costing $2,500psf or more, recorded 75 units, or 5.4%. Both markets saw the highest levels reached for this year and reflect a returning investor confidence in the mid-to-high-end property market here.”
In fact, Mr Tan observes, not including the ECs, the mid-end market reclaimed its January position as the sector with the most number of sales.
April Sales Expected To Remain Steady
Mr Tan expects April’s sales to hold steady, with over 1,500 units sold. This is due to the fact that developers will be launching more projects in the coming months and the economic growth is at an unexpectedly strong 8.5% for 1Q11.
However, he cautions that this forecast is not withstanding further cooling measures by the Government, and any unforeseen disaster or economic downturn.
“Developers must also remain sensitive to the pricing of their projects,” he concludes.
For enquiries, please contact:
Adam Tan (Corporate Communications Manager) 9006 8726