The Urban Redevelopment Authority (URA) monthly sales volume for private residential units rose 25.7 percent to 1,543 units in March, with Executive Condominiums (EC) comprising 10.2 percent or 157 units sold.
“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,” said Mr. Adam Tan, Corporate Communications Manager at PropNex.
Mr. Tan noted that the strong response to the launch of H2O Residences in Sengkang, as well as the 157 EC units sold, indicated a sustained interest in private property by HDB upgraders.
“Including ECs, 798 units, or 51.7 percent of the total, were sold below the S$1,200 psf mark,” he said, adding that “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).”
In terms of pricing, Mr. Joseph Tan, Executive Director for Residential at CB Richard Ellis (CBRE), said that preliminary estimates by the government show that the private residential price index for Q1 climbed 2.1 percent, moderating from the 2.7 percent hike in the preceding quarter.
While the March figures represent the first increase in monthly sales since November 2010, sales of units have slowed on a quarterly basis.
According to global real estate services firm Jones Lang LaSalle (JLL), the sales volume dropped 14.3 percent quarter-on-quarter when compared to Q4 last year, and fell 16.9 percent year-on-year when compared to Q1 2010.
“Indeed, the number of units sold in Q1 this year is the lowest since Q4 2009,” it said.
JLL noted that the increase in March sales was driven by the Rest of Central Region (RCR), which enjoyed a 121 percent month-on-month increase. The Core Central Region (CCR) also performed strongly with an 87 percent month-on-month increase in sales volume, while the Outside Central Region (OCR) experienced a 14 percent month-on-month decline.
Compared to previous market responses, which saw a 54 percent decline after the 15 September 2009 policy and another 27 percent decline following the 30 August 2010 measures, the 13 January 2011 cooling measures led to only a 14 percent decline in sales volume in the 60 days following their implementation.
Mr. Tan of Propnex said that “investors seem to have taken the 13 January cooling measures in stride 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 S$1,200 psf to S$2,499 psf range, was 670, or 48.3 percent of the total. The high-end market, with units costing S$2,500 psf or more, recorded 75 units, or 5.4 percent.”
“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,” he said.
Meanwhile, Mr. Joseph Tan noted that although activity in the luxury market was passive in March, prices held firm.
“The healthy state of the residential market in the first quarter could have fuelled developers’ appetite for residential sites. Some of the sites sold in the state tender in the past two months fetched aggressive prices, especially those near MRT stations.”
“With the growth forecast of four percent to six percent for the economy remaining on track, we expect the take-up of new homes in the second quarter to be around 3,000-3,500 units and home prices to remain stable,” he said.