The private residential market in September saw a rebound with total 2,064 units transacted, (including executive condominiums) setting the highest recorded transactions this year; a significant 26% increase from August’s 1,638 units sold.
“September’s results were remarkable and largely contributed by the sale of A Treasure Trove closing 683 units, making up 42% of the total transactions. These homebuyers are mainly HDB upgraders and the purchase rationale were the attractive pricing (median price of $915psf) in this development and its proximity to the Punggol MRT. This project certainly helped boost the September sales figure, accounting for about one out of every four units sold in the month,” remarked Mr Mohamed Ismail, CEO of PropNex Realty.
The top selling projects (excluding ECs) in OCR and RCR were certainly instrumental in the robust sales figure, accounting for 929 units, or about 57% of the total number of units sold in September 2011. A Treasure Trove, located at Punggol sold 683 units with median prices of $915psf, Euhabitat sold 138 units at $1,191psf, and The Meyerise in Meyer Road sold 108 units at a median price of $1,789psf, while Arc at Tampines (EC) sold 233 units at $734 psf. The spike in September’s sale of new developer projects in the private residential market was mainly in the Outside Central Region (OCR) and Rest of Central Region (RCR), with 76% of the total units sold saw a median psf of less than $1,200. Executive Condominium (EC) units comprised 433 units or 27% of the total transactions, a noteworthy increase from last month due to the increased income ceiling by HDB.
The strong response to Sim Lian’s A Treasure Trove and Euhabitat, as well as the other 433 EC units sold, indicate a sustained interest in private property by HDB upgraders and the revision of income ceiling had prompted many to purchase ECs. Singaporeans are selling their HDB flats to move into mass-market private homes as part of upgrading for their family enjoyment.
Most of the foreigners or Singapore Permanent Residents who buy in the OCR do so for practical reasons such as proximity to relatives, children’s schooling and commute to jobs and others. They mainly purchase for their own stay and those who buy OCR properties for pure investment returns are a minority.
Investors Looking at Low to Mid-range Alternatives
Investors and home buyers seem to have taken the January 2011 cooling measures in stride, with a renewed demand in the mid-end markets. Excluding ECs, the number of units sold in the mass market with units costing $1,200psf or less, recorded 1,240 units, or 76%, while those in mid-range market, $1,200–$2,499psf range, was 380 units at 23.3% of the total. The mass market saw the highest levels reached for this year while The Meyerise at District 15 also reflects some investors’ confidence of quality developments in prime location.
October Sales Expected To Remain Steady
Mr Ismail expects October’s sales to hold steady, with over 1,400 units sold. This is due to the fact that developers will be launching more projects in the coming months.
Factoring in the worsening economic situation, home buyers and investors may be taking a more cautious approach and signs of lower land bid prices may indicate that prices will be adjusting to the market demands in the private residential market in the coming months. Investors may be holding back on their purchases due to the economic uncertainty as Singapore cuts 2011 GDP growth forecast to the lower bracket of 5% from the original 5 – 6% and the slowing down of the currency appreciation.
“However, comparing with last year, with a total of 12,268 units sold from January to September 2010, there is already 2.6% increase in the total transacted numbers in the private residential market for 2011. If this trend continues into the next few months, we are projecting that this year’s private property market will outperform last year even after the cooling measures were implemented in January 2011. Savvy home buyers are now taking the mid to long term perspectives to investing a home here in Singapore. Overall, we predict that mass-market homes will be the driving force for this private property segment in the next 3 months. This forecast is not withstanding any unforeseen disaster or economic downturn though,” concluded Mr Ismail.
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