This Is Lower Than The 5, 783 Units Sold, 129 And 4 In The Second And First Quarters Respectively

Category: Finance, Real Estate.

In a study of the take- up of new non- landed projects in non- prime areas, The mid- tier and mass market projects turned in strong sales volume since a year ago in 200Until now, the market had perceived that these segments trailed the high- end market in their recovery, and had begun to recover only in early- 2007, in terms of volume and price.

Likewise districts 15 and 16 take- up rates were about 90 per cent. A detailed analysis of the new units launched in 2006 and the corresponding take- up volumes show otherwise. 68 per cent of the new projects launched in the West Coast, in districts 5 and 21 in 2006 had actually been taken up. This is not far from the 74 per cent take- up of projects in the prime districts of 9 and 10 and the 96 per cent of those in the Downtown and Sentosa Cove. The number of new launches in the West has tripled from a year ago, with the launch of one north( 405 units) , One Rochester( 366) , Botannia( 493 units) and The Parc Condominium( 659 units) . A year on, the number of projects on the market in the West( districts 5& 21) has swelled. As well, the number of new launches in Newton/ Novena( district 11) has doubled from 578 units in 2006 to 1, 351 units so far this year, featuring Pavilion 11( 180 units) , Sky Eleven( 273 units) and Hillcrest Villa Paradise( 163 units) .

Over in the East( districts 15 and 16) , take- up in January- September 2007 is equally strong at 85 per cent. Take- up of the projects in these two micro markets has also been very healthy, with 90 per cent of the units snapped up. The pace of the residential market slowed down a little during the third quarter, due partly to the seasonal effect of the Lunar Seventh Month( 13 August to 10 September) , and partly to the credit tightening which resulted from the US sub- prime mortgage problems. With the slowdown, it is likely that the total new homes sold in the third quarter will be around 4, including sales from, 000 units ongoing projects. Developers launched around 3, 500- 4, 000 units, fewer than the average of 4, 300 units in each of the previous two quarters. This is lower than the 5, 783 units sold, 129 and 4 in the second and first quarters respectively.

New benchmarks were achieved by the sale of a penthouse each in The Marq at$ 5, 100 psf and in The Orchard Residences at$ 5, 500 psf. Nevertheless, some projects like The Parc, Soleil and Hillcrest did very well. Preliminary estimates by URA for the third quarter showed that the private residential price index increased by 4% to 5% from the previous quarter. Anecdotal evidence suggested that sub- sale activities have been muted as investors become more cautious. A weaker market sentiment was felt in the secondary market. While the first and second quarters saw secondary market sales volume of 6, 645 units respectively, 514 and 4, it is likely that the third quarter figures will be lower, in the region of 4, 000- 4, 500 units.

Residential rents have gone up significantly due to the shortage of apartments for lease following the slew of collective sales of existing developments in the past two years. The proportion of sub- sales to total sales( primary and secondary markets) is likely to fall below the 4% and 7% registered in the first two quarters. In the last six months, the rental index has risen by 17 per cent, compared to 11 per cent for the whole 200A rise of another 8% to 10% is expected for the third quarter. In particular, rents in the popular areas of Tanjong Rhu, Meyer Road/ East Coast/ Dunman/ Joo Chiat and Siglap have gone up 49 per cent since the fourth quarter of 200Median rents of apartment in the area have increased to$ 62 per square foot per month. More and more expatriates were observed to opting to buy their own homes or move out of the prime districts for cheaper accommodation elsewhere. Apartments in Orchard/ Grange Road/ Tanglin and Bukit Timah witnessed the second highest increase in rentals since the last quarter of 2006, going up by 35 per cent.

Some new launches expected to come on- stream are Hilltops, Ritz- Carlton Residences, the second phase, 21 Anderson of Marina Bay Financial Centre, Turquoise condominium in Sentosa Cove and the first phase of Waterfront View redevelopment project. Tenants in this traditionally popular area are now paying$ 74 per square foot per month on average, compared to$ 72 per square foot per month in the last quarter of 200 Moving into the final quarter of 2007, the residential market will remain active as the government s projected economic growth of 7% to 8% for the year remains on track. The sale of new homes may register 3, 000- 3, 500 units while prices may rise by 6% to 8% , led by possible new benchmarks set by branded residences.