Take-up of new private homes remained buoyant in Q3 2012 due to affordable pricing. New homes sold in the July-September period can reach at least 4,600 units if the sale of units at Kovan Regency and Riversails in the last weekend of September were included. This will lead to around 16,500 units sold in the nine months of 2012, exceeding the record of 16,292 units sold in the whole of 2010.
Based on the caveats lodged to date, the total transaction value has been falling since 2010 even though the difference in the number of units sold each year has been small. This could be attributed to the progressively decreasing size of the units sold. From a median size of 1,044 sf (97 sm) in 2010, it declined to 893 sf (83 sm) in 2011 and 840 sf (78 sm) in 2012. As home prices rose steadily, developers have been creative to provide compact sizes of three- and four-bedroom in their projects that cost just under $1 million each, so that they remain affordable for most of the first-time buyers and upgraders.
Top performers in the quarter were Parc Centros and Parc Olympia which achieved the respective median prices of $920 psf and $870 psf. In addition, eCO was priced higher at $1,250 psf, leveraging on its location in the matured Bedok new town, lifestyle offerings and green theme.
V On Shenton (510 units), which is situated in the heart of the financial district, was launched at the median price of $2,000 psf and was well-received. Another high-end project, Leedon Residence (381 units), was launched at $2,000 psf and some 50 units were sold. Two luxury units in Boulevard Vue were sold at $19.4 mil ($3,930 psf) and $17.7 mil ($4,320 psf).
No new executive condominium (EC) was launched in Q3 2012. Heron Bay, which was opened for e-application at end-September, will only conduct sales in October. In Q3 2012, some 320-350 ECs were sold, mainly from One Canberra, The Tampines Trilliant and Watercolours. This is the lowest quarterly volume since the EC market restarted in Q4 2010.
The Q3 2012 URA Residential Price Index edged up 0.5 per cent q-o-q, translating to a total rise of 0.9 per cent since end-2011. This pattern of marginal rise is expected to continue in Q4 12. We expect rents in Q3 2012 to remain at Q2 2012 levels, supported by a healthy level of renewals and new leases. However, rents may soften by the end of the year as more projects are completed, particularly in the prime residential districts.
Joseph Tan, Executive Director, Residential, CBRE said “Moving on to Q4 2012, more launch activities are expected in anticipation of a fresh wave of capital inflow resulting from QE3 to spur demand.”
Some major project launches include, Skies Miltonia (420 units), The Sennett (338 units), projects at Jalan Lempeng (755 units) and Alexandra Road (560 units). In addition, three or four EC projects may be launched, including Waterbay (383 units) and The Topiary (700 units). With this significant amount of supply coming on, new private home sales could be 4,500 units or more, resulting in around 21,000 units sold in 2012, the highest volume ever seen. However, due to the smaller-sized units sold, the value of transactions in 2012 is likely to be about 10 per cent below the estimated $25.6 bil in 2010 (16,292 units) and more than 20 per cent below the estimated $29.5 bil in the 2007 peak (14,811 units).
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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