Yesterday, the ray of hope dispelled doubts in the market of private homes after the latest data indicated that developers had sold 1,220 new units last month. This figure brought the total sold units during the first quarter to 2,660, making it the best performance for a quarter since the third quarter of 2007. However, some thought that this maybe a false dawn. Preparing to have a weak economic stability, some of the industry observers supposed that it’s still very early to assume that the market has already moved towards recovery.
Figures submitted by developers to the Urban Redevelopment Authority (URA) showed that sales for private homes in March decreased to eight percent from 1,332 units sold in the previous month. Both months’ figures were better as compared in January, when shoppers bought 180 units. Indeed, the total unit sold during the first quarter of 2009 had already reached to 60 percent of that in 2008.
“Most of the demand in the first three months of the year was from Singaporeans and permanent residents, a significant proportion of whom comprised HDB upgrades,” said executive director for Research of CBRE, Li Haw Ho. In fact, the new launches in mid-tier and mass-market projects greatly contributed to the increase of sales in March; the most popular was the Double Bay Residences. Developers Khan Leong and UOL Group also sold 264 flats at the average price of $659 per square foot.
Additionally, The Far East Organisation has also managed to sell 101 units for an average price of $617 per square foot, while The Arte sold 90 units for an average price of $874 per square foot.
There is “strong demand for lower-range properties in the outer areas that are priced below $1,000 puff,” observed Mohamed Ismail, CEO of the Prone. The mid-tier and mass-market sectors were also leading in recent launches. About 95 percent of the total launches during the first quarter of 2009 were seen outside the district 11, 10 and 9, noted by Chua Chor Hoon, DTZ senior director of research. Developers launched 832 new units last month, down to 22 percent from 1,072 units in February.
On the contrary, activities in the Core Central Region remained to be left behind in the previous month while the receptions to The Mercury in Shanghai Road became the strongest, with buyers purchasing 62 units at an average price of $1,148 per square foot.
One of the main reasons for this low performance could be the withdrawal of foreign transactions from the luxury property market, said Nicholas Mak, Knight Frank’s research and consultancy director. “Preliminary figures suggest that the percentage of foreign transactions stood at 16.8 per cent in Q1 2009, settling at levels observed in Q2 2003 when the Sars outbreak badly affected the market.”
Nevertheless, most of the industry observers and experts believe that property market is still facing downside risks and as for the upcoming months, prices in the market may remain flat and the total number of units purchased may decrease.