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Latest Property Real Estate News - Published on 15/05/2014
New private home sales rebounded 55% in April after a slump in March, mainly due to only 1 major new launch in March and April’s re-launches at some projects promising attractive discounts. In all, developers launched a total of 586 units with 745 units sold in the month (excluding ECs)—which signalled that underlying demand is still present despite the current weak buying sentiments. Including ECs, developers found buyers for 793 homes, which also reflected a 48% improvement from the previous month’s figure of 535 units.
Only two new projects were launched in April, which again indicated the current market conditions—especially after the TDSR was imposed. Now that the TDSR has been in play for ten months, the dust has somewhat settled and buying volume is likely to improve in tandem with the anticipated launches of attractive and well-located residential projects.
“We expect new sales volume to improve in the coming months—on the back of more new launches and fairly positive market interest. Lakeville by MCL Land; launched in first weekend of April, was a success with most units sold in the first phase of units released. The Sorrento by Allgreen Properties enjoyed good response and Sky Habitat was re-launched at lower prices. These projects were well received, which boosted sales figures in April,” commented PropNex CEO Mr Mohd Ismail.
Lakeville – the top performer in April
210 units of Lakeville were taken up at a median price of $1,318 psf—making it the best-selling project for the month. The next best-selling project was the recently re-launched Sky Habitat, where 130 units were sold at a median price of $1,377 psf. The Sorrento also performed well with 125 units sold at a median price of $1,414 psf. Finally, The Santorini rounded off the top four with 23 units sold at a median price of $1,124 psf.
Mr Ismail added: "With tightened loan policies, buyers will remain more discerning and developers have to respond accordingly or risk having a poor take-up rate. Developers need to be more sensitive to the market where value for money is key—with price being a key consideration for most buyers.”
Sales volume likely to rebound in 2Q14 but developers will thread with caution
Developers are likely to take on a cautious front and time their launches; keeping in mind that it is a buyers’ market now and there is general expectation of a price correction. Also, developers are expected to continue minting a high proportion of small units in projects to keep quantum prices within reach of TDSR-constrained buyers. Due to the various restrictive cooling measures, investors may feel no great urgency to buy—as they wait for a more attractive entry points.
Moving forward, several highly-anticipated mid- to large-scale projects by established developers will also be launching in second quarter or beyond: Waterfront @ Faber in Clementi by World Class Land, CoCo Palms in Pasir Ris by CDL, Highline Residences at Kim Tian Road by Keppel Land, Marina One Residences by M+S, Trilive Condominium at Tampines Road by Roxy-Pacific and Commonwealth Towers by CDL and Hong Leong Group.
“With the TDSR still in enforcement, it is crucial for developers to price their projects optimally, in order to achieve strong sales. Second quarter new sales volume is expected to improve from the first quarter—to between 2,200 and 2,500 units, as market interest gradually returns with anticipation of developers' attractive offerings for their new launches,” concluded Mr Ismail.
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