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Latest Property Real Estate News - Published on 17/03/2014
Sales volume moved up in February as developers sold 724 new homes (excluding ECs), up from 565 new units in January 2014. This represents a M-o-M increase of 28.1% as developers returned with 2 major launches in the month. However, monthly sales volume still remained rather muted.
Including ECs, developers found buyers for 769 homes, which also reflect a rise of 26% from the previous month’s figure of 610 units.
Analysing the figures, Mr Mohamed Ismail, CEO of PropNex Realty said, “The lacklustre transaction level (for the past 3 months) is evident that post TDSR, buyers have remained highly price sensitive. Taking into consideration of the current property measures, we are likely to see the transactional volume of new homes in first quarter 2014 could be around 60 per cent lower compared to 2013. This quarter, sales could potentially range between just 1,800 and 2,000 units in total, which is one of the lowest in the past 3 years."
“Despite the rather weak sales performance, developers are not likely to moderate prices, due to the land prices at which they've secured the land previously. However, I believe that they will do well if their pricing strategy reflects the current market sentiments.”
Mr Ismail reflected, “The Hillford that was launched in January received excellent market response primarily because of the low price quantum of all the units comprising of one- and two-bedrooms. With the current housing policies particularly the TDSR in place, the housing market has become affordability-biased, which depends heavily on project launch prices. This trend is set to continue into the foreseeable future unless policies are tweaked.”
February sales volume dominated by OCR projects
The OCR sold 588 units in February 2014 largely due to the launches of Rivertrees Residences and Riverbank @ Fernvale—representing about 60% of the month’s sales volume.
The best-selling projects were, namely; Rivertree Residences, which sold 218 units at a median price of $1,111psf, Riverbank @ Fernvale moved 211 units at $1,033psf. Hallmark Residences in CCR found buyers for 26 units at $1,860psf; La Fiesta sold 23 units at $1,182psf and Urban Vista sold 22 units each at $1,259psf.
Pricing strategy crucial to attract buyers who have become highly selective
Assuming that the current cooling measures and lending rules remain in place, this year’s total number of new developer sales are expected to be at least 30% lower compared to 2013. For the whole of 2014, PropNex predicts that developers could sell around 10,000-12,000 private homes excluding ECs.
“Buyers have become very price-sensitive post-TDSR and, are willing to wait for a project that is well located and priced rightly. If developers want to sell their units faster under the current sluggish market conditions, they must demonstrate a willingness to price their projects reasonably. A developer will risk losing buyers to competitors who are willing to price their project more competitively,” cautioned Mr Ismail.
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