Although February saw a 20% dip M-on-M in the number of private home sales to just 1,228 units, this was still a healthy figure taking into account the impact of 13 January’s cooling measures. This M-on-M drop was similar to February 2010’s decline over January 2010.
The impact of these measures can be seen, however, in the fact that the number of transactions for mass market properties, typically priced in today’s climate at below $1,200psf, was 58.8% of the total, the highest percentage since June 2009.
Another reason for the lower number of transactions for February was the fact that only one project sold over 100 units: Waterfront Isle at Bedok Reservoir sold 282 units.
“Usually,” says PropNex CEO Mr Mohamed Ismail, “months with many larger projects launching and selling high numbers of units will see greater sales.”
He illustrates this with September 2010, which saw a lower number of sales against the following months and had, like February 2011, only one project with over 100 transactions.
Strong Demand From Homeowners For Lower Prices
“The number of transactions indicate very clearly that there is still a strong demand for private property,” observes Mr Ismail. “Despite the fact that February is a short month and incorporates the traditionally quiet Lunar New Year festive period, in addition to the impact of the cooling measures on the entire month, 1,228 transactions is a healthy total.
“However,” he adds, “the downward trend in price preference shows that the cooling measures are indeed having an impact,” referring to the higher percentage of transactions occurring in the mass market.
“As a result of the cooling measures,” he elaborates, “the market is seeing fewer investors in the Central Regions, as compared to more homeowner-occupiers in the Outside Central Region (OCR).”
He points out that the four top-selling projects for February 2011 all came from the OCR: Waterfront Isle, My Manhattan, Austville Residences and Canberra Residences. Together, these four projects accounted for 473, or 38.5%, of all units sold for the month.
Mass Market Price Tags Increase
Of the four top-selling projects, Mr Ismail notes that second-best seller My Manhattan actually transacted its 69 units at a median price of $1,219psf.
He says that while mass market projects in the OCR traditionally fell below the $1,000psf mark, rising prices have broken this threshold. He points out that in mid-2010’s economic recovery, many mass market projects were launched at prices above the $1,000psf mark.
“In fact,” Mr Ismail highlights, “Centro Residences at Ang Mo Kio in the OCR saw three transactions in February at a median price of $1,441psf.”
Healthy Number Of Transactions Expected
Given the continued demand and popularity of mass market projects, and assuming that developers maintain reasonable sales prices for future launches, Mr Ismail expects March 2011 to see more than 1,000 units sold.
“The first half of March has already seen over 300 units sold,” he reveals, “with 150 units sold at H20 Residences in Sengkang alone.”
However, he cautions that this forecast is not withstanding further cooling measures by the Government, although given that the latest round of measures are still fresh, he does not expect any new measures in the next couple of months at least.
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