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Price Cuts Don’t Necessarily Leads To Soaring Sales For New Private Homes

| Property Articles | 18/05/2014

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The latest figures from Urban Redevelopment Authority (URA) showed new private home sales picking up in April following bleak numbers in March. In that month, only 535 units (inclusive of executive condominiums (ECs)), changed hands, and of the two projects launched – Ascent@456 and The Santorini – the combined sales figure was a dismal 12.16 per cent, or 76 out of 625 homes released.

By contrast, April moved a total of 793 units. Of these nearly half, or 335 units, were from two property launches in that month. Lakeville and The Sorrento made their debut then. MCL Land, the developer of the 696-unit Lakeville, introduced 230 units into the market and 210 were sold. On the other hand, all the units in The Sorrento were released for sales, and transactions were a brisk 125 homes out of 131.

Median price for Lakeville stood at $1,318 psf and $1,414 psf for The Sorrento. According to JLL national director Ong Teck Hui, the pricing is competitive relative to historical transactions in the area, and this gave a fillip to demand.

Market veterans attributed the recovering sale figures to reasonable pricing by developers of new launches and newly-released units from older launches that are priced at a discount to their initial launch prices.

Using figures from URA monthly new private residence reports, we examine the projects that are sold in April at lower prices to their launch prices.

Excluding the two new launches in April, we only study projects that were launched after the TDSR framework was implemented in June 2012 and / or projects that sold 10 or more units in April.

Table 1a: Projects Sold At A Discount in April 2014 & Their Prices

Project Name

Total Number of Units in Project

Cumulative Units Launched but Unsold

Units Sold In April

% Of Unsold Units In Entire Project

Median Price ($psf) in April

Price Range ($psf) in April

Launch Month

Median Price ($psf) in Launch Month

Price Range ($psf) in Launch Month

% Change in Median Price

Grandview Suites

52

7

4

13.46

1045

1033 – 1088

Oct-13

1301

1190 – 1523

(19.68)

Sky Habitat

509

18

130

3.54

1377

1273 -1622

Apr-12

1583

1435 – 1893

(13.01)

Vue 8 Residence

463

28

5

6.05

881

868-1042

Jul-13

1004

819 – 1204

(12.25)

Bartley Ridge

868

64

10

7.37

1171

1106 – 1244

Mar-13

1296

1031 – 1514

(9.65)

The Bently Residences @ Kovan

48

27

1

56.25

1351

1351 – 1351

Aug-13

1451

1410 – 1461

(6.89)

8 Farrer Suites

34

18

1

52.94

1600

1600 – 1600

Aug-13

1709

1506 – 1725

(6.38)

The Glades

726

71

15

9.78

1425

1210 – 1604

Sep-13

1518

1252 – 1785

(6.13)

Rivertrees Residences

495

48

9

9.70

1051

971 – 1218

Feb-14

1111

943 – 1276

(5.40)

Riverbank @ Fernvale

555

26

7

4.68

981

830 – 1103

Feb-14

1033

837 – 1250

(5.03)

The Venue Residences

266

14

7

5.26

1396

1281 – 1471

Oct-13

1457

1300 – 1563

(4.19)

Sea Horizon

495

106

2

21.41

797

787 – 807

Sep-13

818

713 – 933

(2.57)

Eight Riversuites

862

186

19

21.58

1313

1105 – 1472

May-12

1340

1056 – 1670

(2.01)

Goodwood Grand

73

9

3

12.33

2404

2366 – 2544

Oct-13

2449

2449 – 2449

(1.84)

The Creek @ Bukit

260

61

9

23.46

1610

1501 -1802

Nov-13

1637

1486 – 1882

(1.65)

28 Rc Suites

45

29

2

64.44

1681

1680 – 1682

Aug-13

1698

1482 – 1722

(1.00)

Skypark Residences

506

209

7

41.30

794

768 – 818

Nov-13

800

738 – 896

(0.75)

The Tembusu

337

62

5

18.40

1541

1197 – 1657

Aug-13

1547

1210 – 1704

(0.39)

Source: URA

Table 1b: Projects Sold At A Discount in April 2014

 

Project Name

Street

Region

Property Type

Grandview Suites

Geylang

RCR

Non-Landed

Sky Habitat

Bishan Street 15

RCR

Non-Landed

Vue 8 Residence

Pasir Ris Heights

OCR

Non-Landed

Bartley Ridge

Mount Vernon
Road

RCR

Non-Landed

The Bently Residences @ Kovan

Kovan Road

OCR

Non-Landed

8 Farrer Suites

Sing Joo Walk

RCR

Non-Landed

The Glades

Bedok Rise

OCR

Non-Landed

Rivertrees Residences

Fernvale Close

OCR

Non-Landed

Riverbank @ Fernvale

Fernvale Close

OCR

Non-Landed

The Venue Residences

Tai Thong Crescent

RCR

Non-Landed

Sea Horizon

Pasir Ris Rise

OCR

EC

Eight Riversuites

Whampoa East

RCR

Strata-Landed / Non-Landed

Goodwood Grand

Balmoral Road

CCR

Strata-Landed / Non-Landed

The Creek @ Bukit

Toh Tuck Road

RCR

Non-Landed

28 Rc Suites

Race Course Lane

RCR

Non-Landed

Skypark Residences

Sembawang

OCR

EC

The Tembusu

Tampines Road

OCR

Non-Landed

Source: URA

From Table 1a, we note that for the nine projects with at least a five per cent drop in the median price ($ psf) for April from the initial median price at launch, only Sky Habitat at Bishan moved more than 50 per cent of its remaining unsold units. In fact a spectacular 130 units, or 87.8 per cent, were sold after median price ($ psf) dipped by 13.01 per cent.

However, none of the other projects replicated this remarkable sales figures. Even among those with median price($ psf) cuts of close to 10 per cent or more, the number of units that changed hands were not eye-popping.

Grandview Suites’ median price ($ psf) slided by a huge 19.68 per cent, but only four units out of 11 saw takers. This can be attributed to its sleazy location at Geylang.

But even homes in more respectable areas did not experience overwhelming demand after price cuts. Vue 8 Residence at Pasir Ris had a median price ($ psf) dive of 12.25 per cent but sold units were merely five. Similarly, Bartley Ridge with its favourable location at the city fringe and next to the Bartley MRT Station, only transacted 10 units from a pool of 74 units, despite a wide 9.65 per cent median price ($ psf) drop.

The stellar results for Sky Habitat then can be due to its highly popular location in Bishan, and the marketing for its re-launch, along with its revamped showflat.

This suggests that booming sales is not a foregone conclusion even with attractive price slashes – attesting to the highly cautious mood among buyers in this tightly regulated property market.

Separately, we look at some projects which median prices ($ psf) in April had rose from their initial launches. And yes, there are buyers notwithstanding, though few in numbers.

Sky Vue in Bishan witnessed a median price ($ psf) jump of 18.92 per cent, and its minimum price surged from $1,135 psf at its launch to $1,615 psf, but still two units found buyers.

Duo Residences – an iconic upscale mixed development in the prime Bugis area – likewise, saw a significant median price ($ psf) spike of 16.91 per cent, but nonetheless sold two units. Its minimum price also upped from $1,513 psf to $2,262 psf.

Prime homes will invariably find buyers even with premium prices in a weak market.

Table 2a: Projects Sold At A Hike in April 2014 & Their Prices

Project Name

Total Number of Units in Project

Cumulative Units Launched but Unsold

% Of Unsold Units In Entire Project

Units Sold In April

Median Price ($psf) in April

Price Range ($psf) in April

Launch Month

Median Price ($psf) in Launch Month

Price Range ($psf) in Launch Month

% Change in Median Price

Sky Vue

694

9

1.30

2

1666

1615 – 1717

Sep-13

1401

1135 -2031

18.92

Duo Residences

660

45

6.82

2

2337

2262 – 2412

Nov-13

1999

1513 – 2596

16.91

The Quinn

139

120

86.33

1

1624

1624 -1624

Jul-13

1530

1366 – 1592

6.14

Nine Residences

186

53

28.49

5

1170

1022 – 1249

Oct-13

1107

871 – 1284

5.69

La Fiesta

810

8

0.99

14

1216

972 – 1242

Jan-13

1163

956 – 1359

4.56

Lush Acres

380

0

0.00

1

823

823 – 823

Aug-13

790

673 -880

4.18

The Skywoods

420

342

81.43

8

1336

1216 -1353

Sep-13

1290

1119 – 1450

3.57

Q Bay Residences

630

5

0.79

12

1048

905 – 1106

Jan-13

1012

823 – 1277

3.56

Rv Residences

248

50

20.16

4

2114

2090 – 2135

Aug-13

2043

1893 -2091

3.48

Guillemard Suites

146

51

34.93

8

1407

1257 – 1696

Nov-13

1360

1146 – 1672

3.46

Liv On Wilkie

81

11

13.58

1

2592

2592 – 2592

Oct-13

2519

2350 – 2582

2.90

Ecopolitan

512

96

18.75

3

808

788 – 816

Aug-13

793

677 – 871

1.89

Rezi 3two

65

50

76.92

3

1541

1373 – 1548

Nov-13

1519

1374 – 1594

1.45

The Santorini

597

500

83.75

23

1124

867 – 1251

Mar-14

1108

1022 – 1274

1.44

Berkeley Residences

22

8

36.36

4

1515

1480 – 1532

Nov-13

1496

1400 – 1591

1.27

Thomson Three

445

46

10.34

3

1380

1290 – 1488

Sep-13

1363

998 – 1533

1.25

Forestville

653

170

26.03

13

739

654 – 779

Jun-13

730

565 – 816

1.23

Waterwoods

373

186

49.87

18

809

766 – 846

Nov-13

801

743 – 863

1.00

Source: URA

Table 2b: Projects Sold At A Hike in April 2014

 

Project Name

Street

Region

Property Type

Sky Vue

Bishan

RCR

Non-Landed

Duo Residences

Fraser Street

CCR

Non-Landed

The Quinn

Bartley Road

OCR

Non-Landed

Nine Residences

Yishun

OCR

Non-Landed

La Fiesta

Sengkang
Square

OCR

Non-Landed

Lush Acres

Fernvale Close

OCR

EC

The Skywoods

Dairy Farm Heights

OCR

Non-Landed

Q Bay Residences

Tampines
Street 86

OCR

Non-Landed

Rv Residences

River Valley Road

CCR

Non-Landed

Guillemard Suites

Guillemard Road

RCR

Non-Landed

Liv On Wilkie

Wilkie Terrace

CCR

Non-Landed

Ecopolitan

Punggol Walk

OCR

EC

Rezi 3two

Geylang

RCR

Non-Landed

The Santorini

Tampines

OCR

Non-Landed

Berkeley Residences

Lorong N Telok Kurau

OCR

Non-Landed

Thomson Three

Bright Hill Drive

RCR

Strata-Landed / Non-Landed

Forestville

Woodlands Drive 16

OCR

EC

Waterwoods

Punggol Field Walk

OCR

EC

Source: URA

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