Private home sales down 19% on-month to 1,196 units in Feb

Private home sales kept up their momentum in February, with 1,196 units changing hands.

This is down by some 280 units or 19 per cent from January, where the spike in transaction volumes prompted the government to introduce more anti-speculative measures.

But February’s figure is still above market expectations. Analysts had earlier projected sales to range between 800 and 1,000 units.

Analysts said demand for new homes remains strong, despite more government measures to cool the market last month.

Data released by the Urban Redevelopment Authority (URA) showed that new private homes in the city continue to be popular.

The Altez at Tanjong Pagar was a star performer last month, with 150 units sold at a median price of over S$1,800 per square foot. Another project that did well was Waterscape at Cavenagh Road with 82 units transacted.

All in, new homes in the prime district accounted for 521 units of total sales.

Mass market projects were also popular, with over 560 deals done in February.

“We’ve seen demand in that area – outside core central region – increase on a month-on-month basis of about 31 per cent, so that is quite an unexpected phenomenon. A large part of the demand came from The Estuary and that’s about over 300 units sold out of 400 units being launched,” said Chua Yang Liang, head of Research (Southeast Asia) at Jones Lang LaSalle.

Market watchers said the buying sentiment remains strong despite the anti-speculative measures introduced by the government recently.

They said that is because home buyers are still confident about the economic prospects of Singapore, job security and the positive spin offs from the new two integrated resorts.

Some analysts said March could see sales volumes above 1,000 units. That could bring first quarter sales to about 4,000 units. This is on the back of brisk take-up for new projects like The Vision at West Coast and upcoming launches at Sentosa Cove.

Higher-value projects could also lift home prices ahead.

Tay Huey Ying, director of Research & Advisory at Colliers International, said “Of late, we have seen how people continue to snap up properties even at record prices.

“I think if this continues to persist, we could potentially be looking at a property bubble forming because home prices appear to be running ahead of economic fundamentals. And I think the government should continue more demand side measures.”

These includes fine tuning current measures or introducing a capital gains tax.

Last month, developers placed 1,161 units for sale. And analysts said more could be on the way because of strong demand and to pre-empt more market cooling measures.

Source : Channel NewsAsia – 15 Mar 2010