Tuesday, July 15, 2008

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Promising Take-up at Launches of Dakota Residences, Livia, Clover By The Park, Kovan Residences, Amery but Buying Momentum Ceases After Launches

According to a report by Business Times, condos sales are tapering. To me, this comes as no surprise at all. As I've explained in the post: Sales of Livia Condominium at Pasir Ris, I do not see the buying momentum being sustained after the initial surge in number of sales during recent launches.

Here's an excerpt of the report from BT, 15 July:
WHILE City Developments managed to sell 96 units last week at its Livia condo at Pasir Ris, developers of most other projects suffered rapidly declining sales at their showflats....Sim Lian sold 19 units last week at its Clover By The Park condo in Bishan, less than the 59-unit sales it achieved in the preceding week...Sim Lian also sold a unit at The Amery, a freehold project in the Telok Kurau area, last week - again a less sparkling performance than the four units it sold a week earlier.... Next to Geylang River, NTUC Choice Homes and Ho Bee found buyers for another nine units at Dakota Residences last weekend. This brings total sales to 170 units in the 99-year project, which has an average price of about $980 psf... Over in the Kovan MRT Station vicinity, the developer of Kovan Residences sold about 20 units last week, bringing total sales to over 100 units since the 99-year project was previewed at a private party on June 28.

Potential buyers should look out for the build up of unsold inventories. Note that 72.8% of the June transactions came from 8 new launches while older launches saw fewer transactions. There is still about 2,720 of launched but unsold units from older projects . Property analysts said that they do not dismiss the possibility of developers lowering their selling prices if unsold inventories continue to build up. Also, developers may launch more projects ahead of the Chinese Lunar Seventh Month (the Ghost Month) which is traditional low season for property buying. The increase in unsold inventories and the expected increased in new launches will likely dampen pricing.

In view of the risk of property prices falling further, property buyers should NOT rush into buying a property right now. Apart from the worry about the economy and retrenchment, there's also the increasing competition from more launches to come. For example, Frasers Centrepoint will have its preview for Woodsville 28 near Potong Pasir MRT Station this weekend. It is located three MRT stops closer to town than Kovan MRT Station and will compete with nearby Kovan Residences for the shrinking number of buyers.

Ann, a forumer, wrote in the Singapore Property Forum:
Developers had deliberately withheld launches for half a year. Surely there would be a certain level of pent-up demand. However, that small segment of buyers is quickly exhausted, and developers will have to cut prices to move the next lot of units. The full showrooms but lacklustre sales is also not surprising. As someone said, condo-viewing seems to be something of a national passtime in SIngapore. These crowds are clouds without water. Doesn't translate into actual sales.

I'll add one more line to Ann's comment:
If there's pent-up demand, there's even more pent-up supply.

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

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