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Share of new condo units priced under S$1m falls to 24% of developer sales in Q2: report

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Unit prices of new condominiums in Singapore trended higher in the second quarter of this year, with the proportion of apartments priced under S$1 million falling to 24 per cent of new units sold, from 37 per cent in the first quarter, according to a report out on Monday.

UNIT prices of new condominiums in Singapore trended higher in the second quarter of this year, with the proportion of apartments priced under S$1 million falling to 24 per cent of new units sold, from 37 per cent in the first quarter, according to a report out on Monday.

The proportion of new units priced above S$3 million also rose to 5 per cent, up from 3 per cent in the previous quarter.

The higher unit prices from projects released by developers reflect the high land prices paid for en bloc sites acquired in 2017 to mid-2018, said real estate consultants Edmund Tie in its report.

They also reflect the increase in average unit size as well as a greater preference for larger apartments, said the report.

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Meanwhile, the proportion of resale units priced under S$1 million remained unchanged from the previous quarter at 24 per cent. However, the proportion of resale apartments priced above S$3 million rose to 11 per cent, from 8 per cent in the previous quarter.

For resale properties, unit price ranges remained relatively stable quarter-on-quarter, other than a rise in the proportion of resale and larger sized units priced above S$3 million to 11 per cent in Q2, from 8 per cent the quarter before. 

For new non-landed projects, sales volume in the first half of 2019 rose 7.4 per cent year on year to 3,966 units. In the second quarter alone, sales jumped 30.6 per cent to 2,246 units from the previous quarter.

The number of new projects launched more than doubled to 16 in the second quarter, from six in the first quarter, but the total number of units on offer was much lower at some 2,700 units, compared to 4,900 units in Q1, due to smaller project sizes, the report noted.

The rest of central region (RCR) saw the most launches with nine new projects totalling 1,731 units in the second quarter, compared to four projects offering 326 units in Q1.

Foreigner buyers accounted for 6 per cent of non-landed private homes sold in the second quarter, up from 5 per cent in the first quarter. Notably, the proportion of mainland China buyers dropped to a low of 22 per cent in the period, said the report.

Foreigners were observed to prefer units in the core central region (CCR), with a rise in demand for homes priced above S$4 million in Q2. Singapore citizens and Singapore permanent residents, meanwhile, opted more for less expensive properties in the RCR and outside central region (OCR).

Demand for housing loans also continued to slow in June 2019, declining for the sixth consecutive month by 0.2 per cent month on month, and 0.4 per cent year on year.

Land sales value also dropped 40.5 per cent quarter on quarter due to fewer Government Land Sales (GLS) sites being awarded. GLS sites had accounted for 87.8 per cent of total land sales with two sites sold.

Edmund Tie said its outlook for the private housing market in the second half of 2019 remains "cautiously optimistic",  as it stuck to its forecast of 8,000 to 10,000 in sales of new units for 2019. The agency said prices are largely expected to remain stable with a 3 per cent upside.

"With new project launches expected to pick up in H2 2019 amid strong headwinds from a slowing local economy, ongoing trade tensions between mainland China and USA, Japan and Korea, and the political situation in Hong Kong, demand for non-landed units from foreign buyers may pick up, as Singapore is viewed as a safe investment haven despite the current property curbs," the report said.