(B) Overall Performance of Private Residential Property Segment

[B.1] Cautious Optimism Reinvigorated Private Home Sales

Data from the Urban Redevelopment Authority (URA), shows 1,207 new home units sold in April 2009. Judging by the way things go, it will not surprise anyone if new home sales in the second quarter were to reach 3,000 units.

The recent stock market rally across the globe has given the sentiment in the property market a huge boost. Developer sales in the January-April period have already reached 90% of the whole of 2008. In the first quarter (Q1) of 2009 alone, a total of 2,660 homes were sold.

[B.1.1] High-end homes in Core Central Region (CCR) sold well

High-end homes in CCR sold 322 units compared with only 133 homes sold in March 2009. The sale performance in CCR is a 19-month high.

What is interesting is that many projects witnessed higher unit price of above $1,000 psf, which was not seen in the past 18 months. This is evidence that the market sentiment has improved. However, one can also interpret that developers’ pricing strategy had attracted better buying interests.

Below are comparisons of sale prices between the whole of 2008 and April 2009 in some selected new condo/apartment projects in CCR.

• 22 units at Zenith at Zion Road were sold in January 2008 at a median price of $1,682 psf, compared with three recent transactions at a median price of $1,199 psf.

• 19 units at RV Suites at River Valley Road were sold in November 2008 at a median price of $1,350 psf, compared with 35 recent transactions at a median price of $1,180 psf.

• 12 units at Mount Sophia Suites at Sophia Road were sold in January 2008 at a median price of $1,719 psf, compared with 20 recent transactions at a median price of $1,231 psf.

• 16 units at Parc Sophia were sold in August 2008 at a median price of $1,474 psf, compared with two units sold in April 2009 for $1,018 psf and $1,070 psf respectively.

• 13 units at Mulberry Tree at Moulmein Road were sold in September 2008 at a median price of $1,337 psf, compared with four recent transactions at between $1,194 psf and $1,217 psf.

• Three units at Visioncrest were sold in July 2008 at a median price of $2,123 psf, compared to a median price of $1,651 psf in April 2009.

• Six units at Belle Vue Residences at Oxley Walk were sold in August 2008 at a median price of $2,044 psf, compared to two units sold at a median price of $1,503 psf in April 2009.

• Three units at Luma at River Valley Grove were sold in March 2008 at a median price of $2,754 psf, compared with one recent transaction at $1,548 psf.

• Two units at Lucida at Suffolk Road were sold in July 2008 at prices ranging between $1,442 psf and $1,459 psf, compared with eight recent transactions at a median price of $1,100 psf.

• A unit at The Lincoln Residences was sold in September 2008 for $1,435 psf, compared with 39 units recently transacted at prices ranging between $927 psf and $1,293 psf.

Conclusion: It appears that most developers have lowered the asking prices significantly so as to clear the inventory of ‘leftover’ units in projects that have already been launched publicly since last year. In fact, almost 50% of the 23 projects in Table [1] were first launched in 2008.

In fact, it will become more challenging for developers to offload ‘leftover’ units when the projects reach their TOP stage. This is because by the TOP stage, buyer’s attention will be shifted to the completed units for sub-sales.

 [B.1.2] Mid-tier homes in Rest of Central Region (RCR) did not disappoint either

In all, a total of 362 new home units in 33 projects were sold in RCR in April 2009, compared with 300 units sold in March. See table below for details.

Below are comparisons of sale prices between the whole of 2008 and April 2009 in some selected new condo/apartment projects in RCR.

• 100 units at Clover by the Park at Bishan were sold in July 2008 at a median price of $753 psf, compared with 16 units recently sold at a median price of $730 psf.

• 68 units at Concourse Skyline were sold in September 2008 at a median price of $1,592 psf, compared with 23 units sold recently at a median price of $1,164 psf.

• 47 units at The Peak @ Balmeg at Balmeg Hill were sold in September 2008 at a median price of $1,011 psf, compared with two recent transactions of between $935 psf and $950 psf.

• 34 units at Beacon Heights at the junction of St Michael’s Road and Mar Thoma Road were sold in August 2008 at a median price of $917 psf, compared with the four units sold at a median price of $771 psf in April 2009.

• Seven units at The Rochester were sold in July 2008 at a median price of $1,300 psf, compared with the current median price of $900 psf.

• Four units at Woodsville 28 were sold in August 2008 at a median price of $919 psf, compared with 34 recent transactions at a median price of $751 psf.

• One unit at Versilia on Haig was sold in August 2008 at $995 psf, compared with one recent transaction at $823 psf.

Conclusion: Most developers appear to have taken the correct professional advice and the leading market indicators by slashing their asking prices for projects in RCR – some by more than 25% – so as to lighten unsold inventory amidst growing uncertainties in the real economy. The pattern is also repeated in the mass market home segment in OCR.

[B.1.3] Sale of primary home units in Outside Central Region (OCR) slides

In all, a total of 523 new home units in 42 projects were sold in OCR in April 2009. However, when compared to the 779 new home sale figures in March 2009, there was a drop of 32% in sales volume.

The 779 new home transactions in OCR in March 2009 were contributed chiefly by the stellar performance of Double Bay Residences at Simei Street 4 and Mi Casa at Choa Chu Kang Ave 3. Both the projects continue to chalk up impressive sales in April; and they have both enjoyed slightly higher median price at their respective showrooms. See table below for details.

Below are comparisons of sale prices between the whole of 2008 and April 2009 in some selected projects in OCR.

• 22 units at Breeze By The East at Upp East Coast Road were sold in April 2008 at a median price of $948 psf (with the highest psf price at $1,080 psf), compared with three recent transactions at a median price of $740 psf.

• Seven units at The Amery at Lorong K Telok Kurau were sold in July 2008 at a median price of

$877 psf, compared with three recent transactions at prices between $727 psf and $863 psf.

• Seven units at Lynwood Eight were sold in August 2008 at a median price of $734 psf, compared with a unit sold recently at $464 psf.

• Seven units at Naturalis at Lorong M Telok Kurau/Still Road were sold in September 2008 at a median price of $909 psf, compared with three recent transactions at prices between $827 psf and $881 psf.

• Four units at Park Natura at Bt Batok East Ave 6 were sold in February 2008 at a median price of $1,034 psf, compared with three recent transactions at $949 psf.

• Four units at The Lucent at Lorong N Telok Kurau were sold in October 2008 at a median price of $958 psf, compared with four recent transactions at prices between $620 psf and $750 psf.

• Three units at The Verte at Lorong H Telok Kurau were sold in September 2008 at a median price of $908 psf, compared with two recent transactions of between $682 psf and $687 psf.

• Two units at Botannia at West Coast Park were sold in January 2008 at a median price of $829 psf, compared with nine recent transactions at a median price of $690 psf.

• Two units at 3@Sandilands at Sandilands Road were sold in August 2008 at $863 psf and $841 psf respectively, compared with a recent transaction done at $724 psf.

• A unit at Bayou Residence at Upper Paya Lebar Road was sold in August 2008 at $854 psf, compared with another unit sold recently at $300 psf.

[B.1.4] No transactions in luxury homes

However, for the fourth consecutive month, there has been no transaction in the luxury segment, where prices are typically higher than $2,500 psf.

It seems that the acid test for the ‘recovery theory’ is still the performance of the real economy which appears to be rather subdued despite all the euphoria at both the stock as well as the property markets.

This article first appeared in Sam Gian's Property Market Update May 2009 which was published in June.