The government measures to cool the real estate market have not deterred the enthusiasm of home buyers. Property developers sold 1,761 private homes in March alone – up by 47 percent from February’s 1,202.
According to the latest figures released by the Urban Redevelopment Authority (URA), home sales hit 4,446 units in Q1 2010 – more than double in Q4 2009 and 67 percent higher than that in Q1 2009.
Besides transaction volumes, industry observers are still monitoring the trend of property prices, as that will determine if the government has to implement more cooling measures ahead.
“If the sales volume continues to reach this kind of level, accompanied by strong increases in prices, especially if that happens in the mass market, I think there is a high likelihood that more measures will be introduced,” said Ms. Tay Huey Ying, research and advisory director of Colliers International.
The sales figure in March is a seven-month high, coming after the 1,805 units recorded in August 2009. Most activity was seen from the core central region (CCR) and the outside central region (OCR), accounting for 41 percent and 44 percent of all transactions, respectively.
At least six new launches were seen in the CCR, like Nathan Suites, 76 Shenton and Seascape. With all 202 units snapped up by home buyers at prices ranging from $1,583 psf to $2,559 psf, 76 Shenton chalked up the highest number of units sold.
The highest transaction prices were seen at existing projects. A unit at The Orchard Residences went for $3,155 psf, while one at Nassim Park Residences went for $3,465 psf.
In the OCR, more than three new projects were launched, including The Vision, Parc Elegance and Primo Residences. At The Vision, 236 units changed hands at a median price of $1,050 psf.
Availability of more new homes and better economic conditions were some of the reasons cited by property consultants for the strong results in March. Developers rolled out 1,790 new units, 54 percent more than the month earlier.
Mr. Tan Tiong Cheng, chairman of Knight Frank, added that February would be quieter due to the Chinese New Year. Inevitably, March sales seem to be much stronger in comparison.
Many consultants reckoned that the anti-speculation measures introduced by the government in February for the private home market would not have much impact. As what Ms. Chua Chor Hoon, research head of DTZ in South-east Asia, said, they were aimed only at a small group of buyers who might have overstretched themselves.
Ms. Tay of Colliers even suggests that the private home sales could have been spurred by a separate set of cooling measures for the HDB market in March. Based on her analysis of caveats for new sales, HDB flat owners accounted for 44 percent of buyers in March, up from 33 percent in February.
HDB upgraders may be rushing “to lock in their private property purchases for fear of being caught in a double-whammy situation where private property prices rise beyond their means, and HDB resale flat prices fall after the government stepped in to curb speculative activity,” she said.
According to Prime Minister Lee Hsien Loong, the government will keep watch over the next few months to determine if more action is necessary. “If we need to, we will. We have some instruments,” he said.
However, most consultants think that March sales will not likely pose a serious threat.
“The government is not as concerned about volume as about prices,” said Mr. Tan of Knight Frank. “And even more important is that the price increase has slowed down.”
Barring any shocks to the property market, consultants expect strong sales to continue. Total projected home sales for the year range from 10,000 to 15,000.
“Sentiment is even higher now with the GDP growth forecast revised upwards,” said Ms. Chua of DTZ. “Some sceptics who had been holding back would be drawn into the market.”
Mr. Li Hiaw Ho, executive director of CBRE Research, pointed out that the robust sales momentum in Q1 2010 continued through April. Buyers have already purchased more than 300 units at the launch of Waterbank at Dakota this month.