The price quantum of non-landed homes sold in the second quarter of 2009 were up to 28.0 per cent higher than those sold in the first quarter of 2009, ending the first half of 2009 on a high note.

CBRE Research compared prices of new sales, resale and sub sale units for 99 year leasehold and freehold non-landed transactions across the island. The quarter-on-quarter change was the largest for sales of new freehold non-landed projects. Prices of freehold units averaged $733,000 in the first quarter of this year, and saw a jump of 28.0 per cent to $938,000 in the second quarter. In the first quarter, most of the new freehold homes sold were shoe-box sized units coming from Alexis, Newton Edge, Parc Sophia, RV Suites and The Mercury which reflected a median price of $1,000 psf - $1,200 psf. In the second quarter, a large proportion of the units sold were larger family-sized units such as IResidences, The Arte, Versilia On Haig which reflected a median price of $830 psf - $925 psf. On a unit rate basis, the new freehold homes sold in the second quarter was 14.6 per cent lower than that in the first quarter. This is because the caveats for higher-priced Martin Place Residences, The Wharf Residences and One Devonshire have not been lodged yet. Once these caveats are lodged, we expect the unit rate to be higher than the rate of $1,051 psf in the first quarter.

Sales of new 99-year leasehold projects such as Caspian ($580 psf), Mi Casa ($625 psf), Double Bay Residences ($650 psf) averaged slightly lower compared to freehold non-landed projects at $788,000 in the second quarter, up 13.2 per cent from the first quarter where prices averaged $696,000. But based on the unit rate, the second quarter’s price of $655 psf is 6.9 per cent higher than the previous quarter’s. Resale prices for freehold projects increased 8.2 per cent, compared with 99-year leasehold projects which saw a 2.9 per cent rise from the first quarter while on a unit rate basis, the increases were 1.4 per cent and 10.1 per cent respectively.

“The market continues to put a premium on freehold projects but overall, there has been a turn of sentiment. The stock market rally, coupled with strong liquidity and developers’ discounts have resulted in a surge in new home sales this quarter, to levels similar to the market peak in 2007” said Joseph Tan, Executive Director, Residential. “This is a surprising turn of events, a welcome respite from all the bad news that has cast a shadow over the market for some time” Mr Tan added.

CBRE expects sales of 3,500 to 4,000 units at the close of the second quarter, much higher than the 2,596 units sold in the previous quarter. Back in the peak of 2007, the average number of new homes sold per quarter was 3,700.

Based on the caveats lodged to date, HDB upgraders made up 65 per cent of buyers of new homes in the first half of 2009, compared to 44 per cent in the whole of 2008. The upgraders have also been very active in the secondary market this year. They made up 49 per cent of the buyers of resale and sub sale units, up from 33 per cent of buyers in 2008.