WITH developers' sales of private condominiums falling 48 per cent in November from a month ago to 412 units and December being typically a slow month, it is almost a foregone conclusion among property consultants that new private condo sales for the full year will be about half the level of last year.
The latest monthly data from the Urban Redevelopment Authority on developers' sales reflected mixed fortunes in the private residential market - weak sales of private condominiums on the one hand and brisk sales of executive condominiums (ECs) on the other.
With three EC projects launched last month following nearly a year of hiatus, buying interest swiftly shifted to the more affordable ECs - a hybrid form of private-public housing sold with restrictions imposed by the Housing & Development Board. This turned Lake Life, Bellewaters and Bellewoods into top-selling projects in the month.
Including the 855 EC units sold in November, up from 90 units in October, total developer sales tallied up to 1,267 units in November - a 45 per cent jump from October.
JLL national research and consultancy director Ong Teck Hui said: "November was a tale of two fortunes - a waning private residential market in contrast with a brisk EC market. The fate of the private home market for 2014 is sealed as December is likely to be another slow month as well."
In the first 11 months, a total of 7,137 new private condos and 1,410 new ECs were sold by developers. Property consultants are projecting full-year sales of private condos (excluding ECs) by developers to be around 7,500-7,700 units, down from 14,948 new private condos sold last year. Another 3,588 new EC units were sold in 2013.
The EC segment presented a bright spot in November, thanks to the three newly launched EC projects that sold a total of 782 units out of 1,758 units launched. Mr Ong noted that this is the highest monthly sales and units launched since the resumption of EC launches in 2010.
Being the first EC to be launched in Jurong after many years, the 546-unit Lake Life was a near sell-out, moving 533 units at a median price of S$869 per square foot (psf); Bellewaters in Sengkang had 170 units sold at a median price tag of S$813 psf; and Bellewoods in Woodlands moved 79 units at a median S$800 psf.
In contrast, the two private condos launched in November - Sophia Hills and TRE Residences - fared poorer. Sophia Hills in Dhoby Ghaut sold only nine out of its 493 units at a median price of S$2,292 psf. TRE Residences in Aljunied sold 52 out of its 250 units at a median price tag of S$1,588 psf.
Colliers International director of research and advisory Chia Siew Chuin said that the diversion of buying interest to ECs is "an indication of buyers' price sensitivity amid tightened credit environment".
Desmond Sim, CBRE research head for South-east Asia, noted that the success of Lake Life could be attributed to latent demand in Jurong West, which has not seen a new EC project since the launch of The Floravale in 1999. Other consultants pointed to Jurong's attraction as a rejuvenated town.
There had been no new EC project launches for nearly a year due to a government rule last year to cool prices of EC land parcels. Developers that acquire EC sites after Jan 11, 2013, can begin sales only after 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.
With nine more EC launches having a total of 5,000 units in the pipeline next year, SLP International executive director Nicholas Mak projected that their take-up rates may be slow in the "absence of meaningful price cuts", with the resale levy for second-time buyers for these projects likely to curtail demand.
R'ST Research director Ong Kah Seng pointed out that these upcoming ECs are located in places that already have earlier EC projects that "soaked up substantial demand". Hence, the new EC launches in 2015 are unlikely to experience a similar take-up rate as Lake Life.
Skypark Residences in Sembawang and Waterwoods in Punggol - both launched late last year - still have 170 and 68 unsold units respectively, after moving another 14 and 21 units last month.
OrangeTee research and consultancy manager Wong Xian Yang noted that while developers are resistant to aggressive price-cutting, they may offer attractive incentives to move sales at projects that are close to incurring penalties for unsold units under their qualifying certificates, which require them to finish selling all units within two years from the project's completion.
"As such, buyers should keep a close eye for good bargains at project relaunches, which would not be otherwise possible in a normal market," Mr Wong said.