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Q1 High Home Sales Unlikely To Be Sustained

April 12th, 2012 · No Comments

SINGAPORE: The high sales volume of new private homes make out in the first quarter of 2012 is not expected to be sustainable. This is a statement from a real estate consultancy CBRE.

In the first three months of 2012, CBRE expects 5,200 units of new private homes to change hands, the second highest from the time when the 5,578 units sold in Q3 2009.

The strong demand is for the most part driven by a large supply of new units in the market, high liquidity as well as low interest rates.

Li Hiaw Ho, Executive Director at CBRE Research said, “This increase in sales is due in large part to the slew of projects featuring compact apartments that have flooded the market in recent years.”

CBRE maintains that the smaller quantum of each unit makes compact apartments – or what’s commonly known as “shoebox apartments” – very reasonable.

And they also provide a safe haven for investors who are eager to park their savings.

CBRE says the few projects that were completely sold in Q1 were Guillemard Edge (275 units at a median price of $1,215 psf), Casa Cambio (198 units at a median price of $1,390 psf), Millage (70 units at a median price of $1,350 psf) and Tree Scape (30 units at a median price of $1,400 psf).

As at end-February, the three top-sellers were Watertown in Punggol Central with 924 units sold, The Hillier in Hillview Avenue with 457 units sold and Parc Rosewood in Woodlands with 577 units sold.

In tandem with the increased sales activity in Q1, CBRE says the high-end segment which has been rather quiet also showed a pick-up in activity.

The Scotts Tower reported 13 units sold between $3,311 psf and $3,680 psf; two units in Scotts Square were sold at $4,661 psf and $4,533 psf, and a unit in Skyline@ Orchard Boulevard was sold at $4,140 psf.

In spite of the thin transaction volume, CBRE maintains that  high-end prices were still holding out.

The real estate consultancy also detected strong sales volume for Executive Condominiums (EC) following the government tweaked policy to lift the proportion of ECs allocated to second-time home buyers from 5 percent to 30 percent.

In the weekend subsequent to the announcement, CBRE says 82 units in Twin Waterfalls were disposed to second-timers and about half of this number was sold to the same group at Tampines Trilliant.

Glancing at the sale of current EC projects, CBRE notes that some 60 per cent of the Singapore property buyers were second-timers, a turnaround from the period prior to 2005 when some 80 per cent of the buyers were composed of first-timers.

Going on to Q2, CBRE expects developers to remain focus on marketing mass-market projects as buying interest in this segment is likely to stay healthy.

And it says developers should be able to sell around 1,000 units per month.

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