After a record 14.1% plunge last quarter, URA’s price index has shown definite signs of recovery with a slight dip of just 4.7% to 133.3. This is not surprising given the increasingly promising volume of private property sales in the last five months, which saw a new record of 1,825 transactions in June. Leading real estate agency PropNex expected these healthy signs, given that the agency’s 2Q09 private property resale transactions hit a staggering increase of almost 190% Q-on-Q.
Says PropNex CEO Mohamed Ismail: “While the 4,521 new sales sold by developers in 2Q09, up from a mere 2,552 in 1Q09 is not surprising, what is interesting to note is the breakdown of these units in terms of their region.”
The Core Central, Rest of Central and Outside Central Regions saw 1,386 (30%), 1,815 (40%) and 1,320 (30%) being sold. This is a vast difference from 1Q09, which saw the three regions recording sale of 222 (8.5%), 712 (28%) and 1,618 (63%) respectively.
“This can be attributed to the fact that 1Q09 saw many HDB upgraders,” explains Mr Ismail, “while there were more investors taking advantage of the cheaper prices in 2Q09.” Although, he admits, there were fewer speculative purchases in 2Q09 than when the market was booming in 2007.
Other factors which Mr Ismail says caused the 77% increase in the number of sales were the greater market confidence, the rallying of stock near to record high, attractive pricing by developers for new launches, the increased willingness of people to buy and low mortgage interest rates. “These are buyers,” says Mr Ismail, who have adopted at least a mid-term view that the market fundamentals will have corrected by then (3 years’ time).
Overall, Mr Ismail is optimistic about the future, which he says “looks positively rosy.” He expects this trend of recovery to continue over the next two quarters, with the fourth quarter’s index recording a positive growth.
For enquiries, please contact:
Mohamed Ismail (CEO) 9487 1414
Adam Tan (Corporate Communications Manager) 9006 8726