Mass market residential "stunningly resilient": Kim Eng

96 % of all properties sold in January were below $1,500 psf.

Kim Eng noted The mass market residential property market has proven to be resilient.

To recap, a total of 2,077 residential units were sold by developers in January this year, with executive condominiums making up about 10% of the total new sales. A staggering 96% were units priced below $1,500 psf, suggesting that nearly all of the action was in the mass market segment with very few sales in the mid- and high-end segments. It was a sharp increase from the previous month, where developers sold only 670 units as a result of the new 3-10% Additional Buyer’s Stamp Duty (ABSD) imposed on selected transactions. The impact of ABSD on the mass market has not been as dire as feared, as seen in January’s strong sales. The resale market demonstrated similar resilience, according to the estimates of the NUS Singapore Residential Price Index for January 2012, where prices in the mass market rose by 1%. Developer sale for February is expected to remain strong; the media has reported encouraging take-ups for projects such as the 670-unit Parc Rosewood by Fragrance Group and Aspial, which saw over 510 units (76%) sold within three weeks of launch. Another project, Macly Group’s Guillemard Edge, has also been reported to move over 80% of its units within the month. With a strong pipeline of mass market projects waiting to be launched, we expect developer sale this year to average over 1,200 units a month. We maintain that the downside risk to property prices is high with at least 12,000 more units to be launched in the next 12 months and any steep increase in prices may prompt the government to introduce further cooling measures.