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Citigold:Update On Singapore Property Market March 2011
Citigold:Update On Singapore Property Market March 2011
Citigold:Update On Singapore Property Market March 2011
By Nicholas Mak
For Citibank’s newsletter
Residential Projects that Launched the Highest Number of Units in February 2011
No. of units
Total number of No. of units sold Median price Median price
Project Name Location launched in
units in Feb 2011 ($psf) in Jan 2011 ($psf) in Feb 2011
Feb 2011
Waterfront Isle Bedok Reservoir Road 561 350 282 $980 $997
The Interlace Depot Road 1,040 250 25 $1,010 $1,126
D’Leedon Leedon Heights 1,715 150 38 $1,554 $1,567
My Manhattan Simei Street 3 301 150 69 N.A. $1,219
Source: Nicholas Mak, URA
Prices of new launches were holding fairly well and the median transacted prices of certain newly launched developments, such as
Waterfront Isle and D’Leedon even increased between 1% and 11% month-on-month in February.
In the prime Core Central Region (CCR) and mid-tier Rest of Central Region (RCR), the number of units launched in February actually
increased compared to the preceding month. In the RCR, the number almost doubled to 670 units launched. The steepest fall was in
the suburban OCR (Outside Central Region) where the number of units released for sale slipped by 41.7% to 714 units.
The marketing campaign and more flexible prices also paid off for developers as the number of private residential properties sold
in February was still above the 1,000-unit level. A total of 1,228 units (including EC) were sold by developers, which was about the
same volume in February last year. However, February’s sales were 21% lower than that of the previous month. Excluding executive
condominiums, the sales volume decreased by a smaller 8.9% month-on-month to 1,101 units. Sales in the CCR and RCR fell by 29.9%
and 45.5% to 141 and 223 units respectively. However, in the suburban areas, developers’ sales surprisingly increased by 23% to 737
units. The three best-selling projects were all located in the OCR. They were Waterfront Isle (282 units sold), My Manhattan (69 units
sold) and Austville Residences executive condominium (63 units sold).
Although the latest cooling measures were supposed to spare the first-time homebuyers and these buyers typically make up the
majority of Executive Condominium (EC) buyers, the sale of EC had declined by a sharp 63.2% to 127 units. This is because the steady
supply of EC cannot depend solely on the demand from first-time homebuyers. HDB upgraders are needed to absorb this growing
supply. However the latest home mortgage rules require larger cash outlay from homebuyers with existing mortgages, which led to a
dent in the demand from HDB upgraders. In February, there are a total of 696 unsold units in the four EC projects that are presently
available in the market and more new supply is in the pipeline.
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Pasir Ris Drive 1/ Elias Road 18 340 ChoiceHomes & Chip Eng Leong Development
Outlook
Unlike the sales figures in January, where the first two weeks were unaffected by the latest government intervention, the figures
in February provided the first indication of the performance of the private residential property market after the cooling measures.
Decision makers in the market would have time to digest the implications of the government curbs in January and reacted accordingly.
The outcome in February was that the decline in home sales was not as bad as initially feared.
However, it could be increasingly challenging to keep the monthly sales figures above the 1,000-unit level in the next few months as
the government measures continue to weigh on the market.
The fallout from the devastating earthquake and nuclear power plant crisis in Japan will also have a minimal impact on the local
property market. After all, Japanese nationals only make up 0.15% of the total number of private homebuyers in the past 26 months.
Furthermore, as at the time of this report, the Japanese government had announced that they have the nuclear problems under
control.
Therefore, the Singapore property market will continue to be guided by factors such as the local economic and investment
environment. For the rest of the first half of this year, the primary market sales could be more subdued and vary between 800 and
1,200 units each month. If the trend persists, the primary market sales for the whole of this year could be 20% to 30% lower than
the previous year.
In the medium term, the reconstruction in Japan may add to the inflationary pressure in the rest of Asia. This could in turn increase
the demand for real estate as a hedge against inflation.
consultancy and business development. Mr Mak is currently the Executive Director of the Research & Consultancy Department
of SLP International Property Consultants. Besides conducting research, he provides real estate advisory services to
government statutory boards, real estate funds, developers and financial institutions.
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2 Printed on 03/2011