2009 total transaction value of new homes 69% of that in 2007

Transaction value for 2010 expected to be between $16bln and $22bln.

2009 recorded a total transaction value (in dollar terms) of some $16.22 billion based on caveats for the full twelve months in the year. In comparison, the total value of new home sales for the whole of 2007 was $23.52 billion worth of primary transactions. CBRE's analysis of URA data indicates that the dollar value of 2009's transactions in the new home market accounted for only 68.9 percent of the total value in 2007, according to a CRBE report.

However, the total transaction volume for 2009 was similar to that of 2007. For the full year 2009, URA statistics show that 14,688 new homes were sold in the private residential market. 2007 recorded an all-time high of 14,811 new home sales. The lower transaction values in dollar terms recorded in 2009 compared to 2007 can be attributed to the proliferation of small-format homes of less than 500 square feet with relatively lower price quantums as well as the popularity of mass-market homes in 2009. Much of the demand in 2007 came from the luxury segment where the overall price quantums were high.

The total transaction value of caveats from January to March 2010 account for some $4.2 billion in primary sales, or about 26 percent of last year's total transaction value. It appears that the residential market at the start of 2010 reflects a follow-through of the momentum that begun a year ago in 2009. In 2007, the luxury segment of the market led the residential boom before trickling downwards to the prime, mid and mass market segments. The reverse occurred in 2009, where the swell in demand started from the mass market before it built upwards to the mid and prime segments.

Joseph Tan, Executive Director, Residential expects that the total transaction value (in dollar terms) in 2010 will lie between the $16.22 billion in 2009 and the $23.52 billion in 2007 even though transaction volume in units sold would be similar. He explained, "Prices are generally higher in 2010 with demand remaining robust. On that count the total value at the end of the year should be higher than that in 2009. In addition, there is a good chance of the luxury segment making a notable return in the later half of the year, as competitive tax rates and a highly rated liveable environment might attract more high net-worth foreigners to Singapore."

The number of new homes sold in the first quarter of 2010 numbered 4,380 units, paving the way for similar transaction volumes recorded in 2009 and 2007, at 14,000 units each year.