Strong supply, high liquidity and low interest rates continued to drive new home sales in Q2 2012. According to CBRE estimates, some 5,300 new homes were sold in Q2 2012. Although this number was 19 per cent lower than Q1 2012’s 6,526 units, the total of 11,800 units sold was the highest half-year take-up ever seen.
In terms of both supply and sales, mass-market housing dominated the market as most of the projects were located in the heartlands. Developers stepped up efforts to market their projects by offering cash rebates, discounts, lucky draws and hiring celebrities to promote sales via media. The top-selling projects in the quarter were Ripple Bay, Flo Residences and Palm Isles, which were priced between $850 psf and $880 psf.
In the mid-tier range, all 244 units in Katong Regency were sold at a median price of $1,700 psf. The high-end segment saw more sales activity compared to Q1 2012. Notable deals included five units in TwentyOne Augullia and 13 units in Marina Bay Suites that were sold at $3,900-$4,300 psf and $2,180-$2,775 psf respectively.
The caveats lodged for new homes sold showed that the median size of new nonlanded homes grew over the quarter. In Q2 2012, it was 79 sm (850 sf), compared to 65 sm (700 sf) registered in Q1 2012. Over 2,100 units (71%) sold in Q1 2012 were 75 sm (807 sf) and below while in Q2 2012, only 1,400 units (46%) were in this range.
In the executive condominium market, two new projects were launched in Q2 2012. One Canberra in Yishun sold 240 units at the median price of $710 psf while Watercolours in Pasir Ris sold around 220 units at $705 psf. Compared to Q1 2012, the take-up rate has slowed down as a result of higher supply and higher price points.
Home prices held firm in Q2 2012, evidenced by the estimated marginal rise of 0.4 per cent q-o-q in the URA Residential Price Index. Our basket of properties showed that the rise could be attributed to the slight price rise in luxury and mass-market homes, up from Q1 2012. In terms of rents, we expect home rents to remain unchanged from Q1 2012 levels because there are several vacant units waiting to be leased out.
Joseph Tan, Executive Director, Residential, said “Looking to H2 2012, developers will continue to focus on the mass-market segment.” Some of the major project launches include Riversails (920 units), Parc Olympia (486 units), projects at Jalan Lempeng (892 units) and Alexandra Road (560 units). In the CBD, V On Shenton (510 units) and a project in Marina Bay will be launched.
“With this forth-coming supply, new home sales may number 3,000–4,000 units per quarter. We expect home prices to remain stable and rents to see a marginal decline in the later part of the year.” Mr Tan added.
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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