Home sales volume sets record low

Not only is it the lowest achieved this year but it also breaks the streak during which sales volume of private homes breached the 2,000-unit level since February.

Ms Chia Siew Chuin, Director of Research & Advisory, Colliers International, commented:

Developers maintained their launch momentum in May 2012, releasing a total of 2,449 private housing units (excluding ECs), the fifth consecutive month where total launches exceed 2,000 units. Nonetheless, total developers’ sales fell 31.8% month-on-month (MoM) to 1,702 units in May 2012.

Sales volume fell across all three market segments, marking the lowest sales volume achieved this year; at the same time breaking the three-month-long streak during which developers’ sales volume of private homes breached the 2,000-unit level since February.

The lower new sales tally in May was mainly the result of fewer large-scale project launches in the Outside Centrel Region (OCR) during the month.

Only four new projects were debuted in the region in May 2012 – Flo Residence, Vibes@Upper Serangoon, Shiro and Shoreline Residences. Flo Residence which is located in Punggol, was the only large project launched in the region. A total of 226 units out of the 338 units released from the 530-unit development found buyers. The 60-unit Vibes@Serangoon was fully launched and 44 units were sold during the month. Shiro, a 16-unit landed housing project located in Telok Kurau was 50% sold. The fully launched 10-unit Shoreline Residences sold four units.

Meanwhile, developers continued to release and sell units from previously launched projects. For instance, the developer for Seahill in West Coast Crescent released 205 units and sold 200 units. Another 100 units were also released from Bartley Residences at Lowron How Sun and 28 units were sold.

In all, developers launched 1,135 units and sold 1,205 units in the OCR, down 30.1% and 20.8% MoM, respectively. As a result, the market share of launches in the OCR thinned from 67.9% in April to 46.3% in May. Nonetheless, the region continued to contribute a majority share of 70.8% to total private developers’ sales in May, compared to 61% in the previous month.

Encouraged by the slight improvement in sales performance in April as a result of the spill-over of exuberance from the OCR, developers stepped up on launches in the Rest of the Central Region (RCR) and Core Central Region (CCR) in May.

In the RCR, developers launched 1,005 units, up 85.4% MoM. Sales, however, did not match the enthusiasm of developer’s launches, with only 362 units managed to find buyers, which is a 53.6% decline from April. The onset of a price decline for non-landed housing in the RCR, albeit slightly by 0.6% QoQ in 1Q 2012 could have prompted potential buyers to hold back for further price corrections, particularly amid the recent renewed concerns over the sovereign debt issues in the Eurozone.

The RCR featured four new project launches in May. They include the fully released 862-unit Eight Riversuites at Whampoa East which found buyers for 192 units; the 68-unit 8M Residences on Margate Road which moved four units of the 68 units launched; the fully launched 28-unit Gaia located at Jalan Dusun saw two units sold; and the 15-unit Urban Heritage situated in Balestier which found buyers for all the 15 units launched.

These newly launched projects made up 97.8% and 58% of all units released and sold in the RCR. Overall, the RCR accounted for 41% and 21.3% of all units launched and sold, respectively in May, compared to 22.7% and 31.3% correspondingly in April.

Similarly in the CCR, developers rolled out 309 units in May, an increase of 36.7% compared to April. However, new sales totalled only 135 units, down 30.1% MoM. As a result, the proportion of project launches and sales in the CCR to the total launches and sales in May expanded to 12.6% and 7.9% respectively, compared to the corresponding share of 5.3% and 4.3% in April.

New launches in the CCR include the 31-unit Bishopsgate Residences (15 units launched, one unit sold); the 120-unit Stella RV (57 units launched, three units sold) and UP@Robertson Quay (20 units launched, 13 units sold).

Although interest for luxury properties remained thin, four transactions at above the $4,000-per sq ft level were recorded for May 2012 - one unit at Scotts Square ($4,566 per sq ft), one unit at Orchard Residences ($4,399 per sq ft) and two units at Twentyone Angullia Park ($4,200 per sq ft and $4,388 per sq ft). This is up from an average of two transactions per month from January to April 2012. This shows sporadic interest in selected projects in the luxury segment.