Strong new home sales in Feb despite CNY, cooling measures

PROPERTY buyers showed few signs of easing off last month and snapped up 1,196 new private homes – more than industry experts had expected for a month many thought would be quieter.

The robust figures follow from a bumper January, when 1,480 private units were sold – a number that trumped the miserly 481 shifted in December, and helped prompt government measures to pre-empt a property bubble.

Sales in January and February hit 2,676 units, already well up on the 2,596 sold in the first three months of last year, with March numbers yet to come.

CBRE Research executive director Li Hiaw Ho said yesterday: ‘As the strong sales momentum in January-February continues into March, new home sales in the first quarter of 2010 could reach 4,000 units.’

Already, Cheung Kong (Holdings) at the weekend sold 160 units of The Vision in the west coast at $1,000 to $1,200 per sq ft.

Last month’s sales serve to underline that the property resurgence is more resilient than some had thought.

PropNex chief executive Mohamed Ismail said the figures were ‘impressive’ considering the Chinese New Year holiday typically marks a quieter month. February is also the shortest month, and market cooling measures took effect on the 20th of the month.

The strong performance is ‘testament to the underlying strength of demand for homes by both owner-occupiers and investors’, said Colliers International’s director for research and advisory, Ms Tay Huey Ying.

‘Purchasers appear to be largely unfazed by any short-term corrections the market may see due to potential future government measures as they are confident of their ability to ride through it to benefit from price appreciation,’ she said.

Developers launched 1,161 units last month compared with 1,426 in January, according to Urban Redevelopment Authority data out yesterday.

The bulk of last month’s sales were for projects located in prime or suburban districts.

Suburban home sales totalled 563 units, up 32 per cent from January.

One project – The Estuary in Yishun – contributed to most of that number, with 386 units selling at a median price of $757 psf.

CBRE Research said the condo’s strong showing could be because it was the only new mass-market type project launched in the Yishun area in several years.

Altez in Tanjong Pagar and Waterscape at Cavenagh also did well, selling mostly one- and two-bedroom units, it said.

Overall, sales of city-fringe and prime projects dipped last month, although seven units priced above $3,000 psf were sold, up from one in January.

Four units at Nassim Park Residences went at a median price of $3,202 psf, two at Orchard Residences sold at a median price of $3,547 psf and one at Seven Palms in Sentosa Cove attracted $3,318 psf.

‘February sales have come down a little, but it is still high. Still, further measures won’t be likely unless prices continue to rise unabated,’ said Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang.

If that happens, a fine-tuning of the current cooling measures and possibly the introduction of a capital gains tax may be possible, he said.

While the seller’s stamp duty introduced last month could reduce new sales by another 5 per cent to 10 per cent this month, its impact is likely to be on speculators in the sub-sales and resale market, said Dr Chua.

Experts expect sales and launches to stay above the 1,000-unit mark this month.

‘Home prices are likely to register an increase based on the higher-value projects sold in the quarter,’ said CBRE’s Mr Li.

Colliers International’s Ms Tay said: ‘Buyers are likely to continue to lock in their purchases for fear of being priced out of the market if prices continue to climb.’

Source : Straits Times – 16 Mar 2010