4,000 new homes to be sold in Q2

About 4,000 new homes expected to be expected to be sold in Q2 sold in Q2 2011 2011, higher than the number sold in the previous quarter.

Median price of homes has fallen from a year ago

Q2 2011 is turning out to be a strong quarter with new home sales volume expected to hit 4,000 units. This would make it 11.3 per cent higher than the 3,595 new homes sold in Q1 2011 and close to the 4,241 units sold in Q4 2010.

Preliminary numbers submitted for developer sales in April-May 2011 totalled 3,380 units.
This means that the entire Q2 2011 new home sales may be around 4,000 units. The top five projects which have contributed to the primary sales volume so far are Eight Courtyards with 467 units sold, Hedges Park with 289 units sold, Foresque Residences with 141 units sold, Terrasse with 184 units sold and Foresta @ Mount Faber with 111 units sold. With the exception of Foresta, the other four projects were priced between $790-$1,200 psf to cater to firsttimers and upgraders.

Caveat data to date from the URA shows a median price of about $1.0 million for new homes sold in the first half of this year, down from around $1.2 million a year ago during the same period.

Joseph Tan, Executive Director, Residential said “The threshold for buyers seems to be $1.0 million for new projects. One reason could be the awareness of rising costs and increased home prices, which may be prompting home buyers to look to smaller sized units”.

The median size for units sold in Q1-Q2 2011 was below 900 sf while those sold in Q1-Q2 2010 was below 1,200 sf. This translates to a median price of just around $1.0 million for the units sold in 1H 2011 while those in 1H 2010 recorded a median price of about $1.2 million. Another reason could be the 60 per cent loan-to-value ratio for home buyers with an existing loan. It is probable that a majority of them are able to service their debt comfortably for a residential property up to $1.0 million.

In the executive condominium market, the 315-unit Belysa at Elias Road was launched in April at the average price of $670 psf. This translates to a 21.0 per cent price gap between Belysa and NV Residences, the private condominium beside it. The price gap accounts for the eligibility conditions and minimum occupation period tied to ECs. More than 160 units of Belysa were sold by end-May.

Residential prices and rents in Q2 2011 remained relatively stable, unchanged from Q1 2011.

Mr Tan added “With the government’s plan to release land for another 8,115 new private homes in 2H 2011 via its confirmed land sales schedule and to release 25,000 HDB flats for sale for the whole year, there is some degree of apprehension as to how it will impact the mass market segment. We expect the take-up of new homes in 3Q 2011 to be lower than the numbers in 2Q 2011.”

Some of the new launches expected to be launched include Leedon Residence, Thomson Grand and two other mass-market projects located at Sengkang Square and Serangoon View as well as an executive condominium project at Segar Road.