Developer sales hit new highs on pent-up demand

Developer sales to moderate over the next few months after they hit a record 2,793 units in March, nearly four times the 712 units sold in February, analysts said.

The record figure was due to pent-up demand arising from developers holding back launches in February in the aftermath of January's cooling measures and also due to the Chinese New Year festive period.

Last month's primary market sales figure of 2,793 private homes (excluding executive condos) is the highest since the Urban Redevelopment Authority began releasing developers' monthly sales data in June 2007. The last time the figure came close to this was in July 2009, when developers moved 2,772 units.


Developers released a record 3,489 private homes last month (up from just 261 in February).

In addition to more sensible pricing, the attractive locations of projects - many near MRT stations - added to the appeal of launches.

A recovery in permanent residents' share of non-landed private home purchases is found across primary and secondary markets combined, to 18.7 per cent in March. In February, the share had slipped to 14.3 per cent from 19.8 per cent in January and 20.6 per cent in December. PRs were slapped with 5 per cent ABSD on their first residential property purchase effective Jan 12.

For the first quarter, developers have sold 5,533 private homes excluding ECs, higher than the 4,353 units in the preceding quarter (based on developers' monthly sales data submissions to the URA).

However, in sharp contrast, transactions of completed private homes in the resale market plunged to 1,838 in Q1 from 3,466 in Q4 last year, going by caveats data.

Developers' top selling project in March was D'Nest in Pasir Ris, with 699 units sold at a median price of $963 per square foot. A seasoned property agent reckons that prior to January's cooling measures, a new project in the area could have been expected to be priced around $1,050-1,100 psf on average.

Outside Central Region (OCR), where mass-market homes are located, continued to hog the limelight, accounting for nearly 65 per cent or 1,814 of the 2,793 private homes sold in March, followed by Rest of Central Region (RCR), with a 29.4 per cent share.

Reflecting the steady price appreciation, islandwide, units costing up to $1,000 psf made up just 24.2 per cent of the March sales.

In contrast, back in July 2009, such units accounted for the lion's share or 57.6 per cent of the 2,772 units sold.

Developers have been minting smaller units while raising per square foot prices over the past four years. Based on caveats lodged for the purchase of non-landed private homes (excluding ECs) in RCR and OCR sold by developers, the median price has risen almost 92 per cent, from $613 psf in Q1 2009 to $1,176 psf in Q1 2013.

Over the same period, the average unit size has shrunk 26.1 per cent, from 1,195 sq ft to 883 sq ft while the median price quantum has escalated 46.5 per cent, from $696,585 to $1.02 million.

Based on URA's data released yesterday, developers sold 279 ECs in March, up from 209 in February. For the first quarter, developers moved 744 ECs, down from 1,682 in the preceding quarter.

Source: Business Times –16 April 2013