New private home sales was nearly 3-years high last month in April 2012. Developers sold 2,487 private residential properties, nearly 4 per cent higher than March 2012 numbers of 2.393 units. The sales figures recorded a much higher increase compared to the April 2011 sales, a 37.8 per cent jump from 1,805 of that month.
These numbers are highest since July 2009 in which 2,772 units were sold. New home sales jumped 3 times in January 2012 compared to December 2011 and since then they are increasing by every passing month.
The high volume of sales largely fuelled by artificial low interest levels also increased expectations of a new property cooling measure round. Dr. Chua Yang Liang from Jones Lang Lasalle says “the policy to curtail excessive demand of developer sales could come into market within the next few weeks” according to Today newspaper.
The notable launches of the month were 454 units Seahill at West Coast, 416 units Hillsta at Choa Chu Kang, 244 units Katong Regency (on the site of old Lion City Hotel) and 509 unit Sky Habitat at Bishan, the most expensive suburban project Singapore has seen.
The trend is against towards the smallest units as more than half of the private residential properties sold at Katong Regency are one-bedroom units. According to Eugene Lim, key executive officer of ERA, all projects, sales were concentrated in the $650,000 - $850,000 range, with HDB buyers forming half of the purchases in this price range.[1] Since the price levels have already passed sane levels, this already high price range can only buy small units at this point in time.
These numbers came just a few days after Minister for National Development Khaw Boon Wan mentioned his concerns about growing number of small apartments dubbed shoeboxes. These apartments are popular among investors who live in HDB flats for the high rental incomes they generate.
CEO of PropNex Realty , Mohamed Ismail, says that buying trends have not been affected by the recent cooling measures, although the policies have created short-term speculation in the private property resale market.[2]:
“The low bank borrowing interest rates and HDB upgraders’ interest had contributed and certainly helped boost the April sales figure,” noted Ismail.”[2]
As iproperty blog article says, any fear from industry players and home sellers about a possible lull in home sales due to the flooding of the market by new private residential projects can be put on rest now since 2,200 homes were sold per month in Q1 2012. The average of 2008 – 2011 period, which looks like very week periods now, were 1,300 homes per month. Why and how? Simple: Rock bottom interest rates! As long as they stay at these levels, there is nothing to worry for the sales side players.
[1] - Today, April new home sales up 3.9%, near 3-year high
[2] - What triggered the record high home sales in April?
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