Jul 24, 2010

Data from Singapore’s Urban Redevelopment Authority for Q2 2010 showed that 4,033 new homes were sold - a 7.9 per cent decline from the 4,380 new homes sold in Q1 2010.

Li Kiaw Ho, Executive Director of CB Richard Ellis Research, commented: “This is expected because news of the European debt crisis triggered volatility in the global stock markets and caused the momentum of home sales to slow down from late-May onwards”

Nevertheless, these latest figures bring the total number of new homes sold in H1 2010 to 8,413 units, which is more than half (57.3 per cent) of the total take-up of 14,688 units in the whole of 2009.

Developers launched 4,180 units in Q2 2010, slightly lower than the 4,372 new homes for sale in Q1 2010. As for the take-up rate, Rest of Central Region (RCR) registered the highest number with 1,710 new homes (42.4 per cent) sold, compared with only 725 units previously. Outside Central Region (OCR) saw 1,624 units (40.3 per cent) sold in Q2 2010, slightly below the 1,728 units sold in the same region last quarter. The Core Central Region (CCR) accounted for only 699 units (17.3 per cent), very much lower than the 1,927 units sold in the same region in Q2 2010.

The projects that sold well in Q2 2010 included The Minton (372 units sold from of the 500 launched) and Tree House (all 429 units sold), both in OCR; Waterbank (615 units sold out of 616 units), Casa Aerata (all 78 units sold) and La Brisa (82 units sold out of 84) in RCR.

The momentum of sale in the resale market was equally strong, and 4,682 homes were transacted, some 5.6 per cent lower than the 4,958 resale homes sold in the previous quarter. Sub-sale activity toned down further as only 723 sub-sales were registered, down from 996 in the previous quarter.

The URA private residential price index rose by 5.3 per cent quarter-on-quarter in Q2 2010, a slight moderation from the 5.6 per cent rise in Q1 2010. This brings the total rise in the index in H1 2010 to 11.6 per cent. The landed homes price index chalked up 6.2 per cent while non-landed homes chalked up 5.0 per cent. Among the landed homes, the price index of detached houses rose by 6.8%, followed by those of semi-detached and terrace houses rose at 6.0 per cent and 5.6 per cent respectively. By location, non-landed prices in OCR showed the highest increase of 5.7 per cent while those in CCR and RCR rose by 5.4 per cent and 4.6 per cent respectively.

Continuing recovery in the economy facilitated the increased hiring of expatriate staff, which in turn, drove the rental market. The residential rental index rose by 5.9 per cent quarter-on-quarter, following a 4.7 per cent increase in the previous quarter. For the first six months of the year, the rental index has increased by a total of 10.9 per cent. Rents for non-landed homes in the CCR led the increase with a 6.4% q-o-q rise, followed by those in OCR and RCR which rose by 6.1 per cent and 5.1 per cent respectively. Among landed homes, rents for terrace houses showed the highest increase of 6.6 per cent quarter-on-quarter whereas the rents for semi-detached and detached houses rose by 5.6 per cent and 4.6 per cent respectively.

The surprisingly strong economic growth in the second quarter will help keep market sentiment positive. However, as the government is also anticipating a slowdown in the growth momentum for the rest of the year, the residential market is likely to move at a more moderate pace. Total take-up of new homes for the whole year may still be able to reach 14,000 units and home prices to rise by a total of between 12 per cent and 15 per cent.