Take-up of new homes will be lower, warns advisor

And to use CB Richard Ellis’ words, “there is some degree of apprehension” amidst the planned release of HDB flats and land for private homes.

Mr Li Hiaw Ho, Executive Director, CB Richard Ellis, commented:

Developer sales in May 2011 numbered 1,575 units, following the 1,805 units sold in April 2011. This brings the total number of new homes sold in the two months to 3,380 units. By the time the sales in June are added, the total number of new homes sold in 2Q 2011 will be more than 4,000 units, higher than the 3,595 new homes sold in 1Q1 2011. In all, we estimate that between 7800 - 8,000 new homes may be sold in 1 H 2011 although only 3,796 caveats have been lodged between January-May according to the URA database. The number of caveats is lower than actual developer sales because lodging caveats is voluntary and there is a time lag from the time of purchase to the time the caveat is lodged.

By locality, the Outside Central Region (OCR) accounted for the highest number of 1,056 units (excluding ECs) sold, followed by 347 units in the Rest of Central Region (RCR) and 172 units in the Core Central Region (CCR). The three projects which sold the higher number of units in May 2011 are located in OCR. Terrasse in Hougang sold 184 units at a median price of $994 psf, Foresque Residences in Bukit Panjang sold 141 units at $1,108 psf and Eight Courtyards in Yishun sold 137 units at $806 psf. In the RCR, the top two performers were The Foresta @ Mount Faber with 111 units sold at $1,919 psf and The Interweave in Balestier with 59 units sold at $1,370 psf.

A new record was set for luxury condominiums by the sale of a units in The Marq at $5,842 psf. This floor rate is higher than the previous record of $5,600 psf set for a penthouse unit in The Orchard Residences. Two other upmarket projects in CCR, The Peak @ Cairnhill and Tomlinson Heights, sold four units each at median prices of $2,637 psf and $3,329 psf respectively.

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.

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