Redas strikes a sombre note on property sentiment

THERE were plenty of new private homes sold last month but a key property industry body warned yesterday that the market sentiment may be more sombre.

Mr Wong Heang Fine, president of the Real Estate Developers’ Association of Singapore (Redas), said January’s strong numbers – analysts tip that about 1,800 units were moved – must be seen in perspective as they do not mean that every project is doing well.

‘January’s figures are generated by the new launches of two or three projects, so the numbers themselves do not really reflect the entire state of the market. You have to look at the numbers a little more in detail,’ he added.

‘Generally, in terms of new launches, they have been getting very good response.

‘And of course for these two or three projects, the product is also very good.’

Mr Wong, who was speaking on the sidelines of Redas’ Spring Festival lunch at Shangri-La Hotel, added that sales from specific projects and locations have to be examined to get a truer picture.

Three projects launched last month – Watertown in Punggol, The Hillier in Upper Bukit Timah and Parc Rosewood in Woodlands – sold about 1,360 units in total last month, according to recent reports. This is in stark contrast to the meagre 632 units moved in December across the entire market.

Data for January’s total new home sales will be released by the Urban Redevelopment Authority on Feb 15.

Mr Wong, who is also chief executive of CapitaLand Residential Singapore, said in his speech that while the strong interest in recent launches shows there is liquidity in the market, foreign purchases, especially in the high-end sector, are well down. Another concern is that the large supply of new office and factory spaces in the pipeline will weigh on rents and vacancy rates.

Developers will have to adopt their own pricing strategy in the light of these market conditions, Mr Wong noted, adding that Redas is still monitoring the impact of the new additional buyer’s stamp duty that came into effect on Dec8.

Mr Wong also told the guests, who included Transport Minister Lui Tuck Yew as guest of honour, that Redas is looking for any Budget incentives that can ‘lower the cost of doing business’.

Developers shared Mr Wong’s caution, with some telling The Straits Times that they are monitoring the market, and also noting that buyer sentiment partly hinges on the health of the global economy.

CapitaLand’s Bishan Central condo project, for example, will be launched when the market is ready, Mr Wong said, noting that it appears ‘quite stable, barring any issues in Europe’.

Frasers Centrepoint Homes chief executive Cheang Kok Kheong said he expects prices to fall by 3 to 5 per cent this year. However, its launches will proceed.

The Straits Times understands that its executive condo project, Twin Waterfalls in Punggol, will be launched this month.

Mr Cheang noted that recent land prices have come down slightly and some of these savings can be passed on to buyers.

‘Obviously, we also lowered our price to meet expectations. We wanted to sell (Watertown) for $1,300 per sq ft but we’ve moved the price down to just below $1,100 psf,’ he added. Watertown is being jointly developed by Far East Organization, Frasers Centrepoint and Japan’s Sekisui House.

Chip Eng Seng CEO Raymond Chia added that the Dec 8 cooling measures would help stabilise the market and it is the land supply in the pipeline that might impact the market more.

The firm hopes to launch a mid- to high-end condo project in Fort Road in the second quarter of this year.

But Mr Chia said that the market is still ‘sensitive’ and the firm will look at it closely before deciding on the project’s pricing.

Source: The Straits Times – 3 February 2012

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