Developer sales in April hit 11-month high

Singapore

DEVELOPER sales of private homes, excluding executive condominiums (ECs), surged in April to an 11-month high of 1,124 units but the volume is expected to ease dramatically again this month - as no major launches are expected.

Property consultants stressed that the 83.4 per cent increase in developer sales from 613 units in March, as well as the 47.5 per cent year-on-year improvement from 762 units in April 2014, was due to two large project launches - Frasers Centrepoint's North Park Residences in Yishun and UOL Group's Botanique at Bartley. With sales of 486 units and 254 units respectively, the two projects accounted for nearly 66 per cent of April's volume.

The Urban Redevelopment Authority (URA) released the April data on Friday.

The near-doubling month on month in the number of private residential units that developers sold came amid a more-than-trebling in the units launched - 1,344 in April, from 400 in March. Supply-led demand has set in as a pattern in Singapore's private residential property market for some time now, note market watchers.

"While it can be said that there has been an improvement in primary market activity, it would be premature to say that market confidence is returning," said JLL national director Ong Teck Hui.

Agreeing, Colliers International director Chia Siew Chuin noted that buyers of North Park Residences and Botanique at Bartley were drawn by the attributes of these projects (including their proximity to MRT stations) as well as their reasonable pricing.

Based on ERA Realty's analysis, 73 per cent of caveats lodged by buyers of North Park Residences were for units below S$1.2 million. For Botanique at Bartley, the figure was 84 per cent.

"Buyers are extremely price and product sensitive," said Eugene Lim, ERA key executive officer, "as most are affected by the loan curbs such as the total debt servicing ratio, and demand-side measures such as the additional buyer's stamp duty."

Elson Poo, general manager, marketing and sales, at Frasers Centrepoint Homes, said that one and two-bedroom units in North Park Residences have been particularly popular.

The 920-unit project will be part of an integrated mixed-use development, Northpoint City, coming up opposite Yishun MRT Station. Besides having retail space (that will be integrated with the group's existing Northpoint Shopping Centre), the project will include a bus interchange.

SLP International executive director Nicholas Mak noted that based on URA's data, North Park Residences did better in April than Botanique at Bartley - despite the former having a higher median price. A total of 486 units, or 52.8 per cent of the project's total 920 units, were sold last month at a median price of S$1,374 per square foot.

For Botanique at Bartley, 254 units or 31.9 per cent of the total of 797 units were sold at a median price of S$1,290 psf in April. "This shows," said Mr Mak, "that residential projects that offer proximity to both MRT stations and malls still attract more buyers than those near MRT stations but without any nearby retail amenities."

Frasers Centrepoint said on Friday that to date, it has sold 526 of the 670 units released at North Park Residences, with Singaporeans accounting for 88 per cent of buyers.

URA's data showed that several earlier launches achieved double-digit sales in April. These include Sims Urban Oasis, with 41 units transacted at S$1,411 psf median price, The Panorama in Ang Mo Kio Avenue 2 (39 units at S$1,229 psf median price) and Symphony Suites in Yishun Close (29 units at S$1,042 psf median price).

For May, if there are no major launches, primary-market sales volumes could drop to about 300-400, predicts Desmond Sim, head of Singapore and S-E Asia at CBRE Research.

Colliers' Ms Chia too expects the May volume to moderate to 400-700 units as launches slow down. "Going forward, homebuyers are expected to keep on their toes, amid multiple headwinds that have created a mood of tentative sentiment, committing only if they perceive a decent value proposition," she added.

Knight Frank executive director, residential services, Tay Kah Poh acknowledged that some developers face pressure to launch residential projects due to regulatory deadlines to complete development and finish selling all the units. That said, they would test the market before launching a project. "They could release some units and watch the market's reactions before adjusting the price, or the mix of units in the initial batch. Developers would also keep an eye on the competition in the area - to avoid getting stuck shortly after an initial sales spurt."

Including executive condominiums (ECs), a public-private housing hybrid, developers moved 1,218 units last month, higher than the 692 units in March this year and 810 units in April last year.

Increasingly, in the months ahead, the spotlight on the launch scene will fall on EC projects. First off will be Koh Brothers and Heeton's Westwood Residences in Jurong, where bookings are slated to begin on May 30. This will be the first EC project where buyers who have already bought a subsidised HDB flat will be subject to a resale levy. This will weigh down demand for units in new EC projects from upgraders, said Mr Mak. In all, he expects five or six EC projects to be launched this year, chalking up sales of 1,800-2,300 units.

Excluding ECs, he expects developers to sell 6,000-9,000 private homes in 2015.