Private home sales jumped a whopping 295% in March

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Thanks to first-time homebuyers.

According to PropNex Realty, a subsidiary of P & N Holdings, the private residential market rebounded sharply last month—as developers returned to the market with a plethora of new launches to entice homebuyers.

Despite the onset of January’s cooling measures, transactions in March reversed the 65% plunge in the previous month to register a healthy 2,793 units sold excluding ECs (or a 295% increase comparing M-O-M).

“Despite the resale market not performing as well, the new sale market has remained robust. With the recent cooling measures, the rebound in March is indicative of robust demand from genuine first-time homebuyers.

Other than developers’ sensitive pricing, many of them could have been attracted by the discounts and rebates offered by developers.

Developers probably took a respite to adjust their pricing and allowed more time for marketing efforts before launching their projects in March 2013—and now that they have more or less assessed the impact of the cooling measures, they returned with an abundance of new projects,” commented PropNex CEO Mr Mohd Ismail, March saw more homes being sold just with a few new launches, some of which included D’Nest, Urban Vista, Sennett Residences, The Trillinq and Bartley Ridge.

As a result of the new launches, 5,000 new private homes have been sold since the beginning of 2013. The best-selling development in March was D’Nest, which moved 699 units at a median price of $963psf.

Hot on the heels are other popular projects which included Bartley Ridge with 367 units sold at $1,296psf. Urban Vista sold 348 units at $1,503psf; Sennett Residences with 238 units sold at $1,474psf.

Lingering cautiousness and price sensitivity by homebuyers

Even though the current economy is stable (with low unemployment and low interest rates), Mr. Ismail believes that the strong new private home sales in March may not be a true reflection of the impact of the cooling measures.

“March’s transaction numbers are a combination of new launches, attractive pricings and discounts/rebates which would lead to short-term robust buying behavior.

Therefore, strong sales are not likely in the coming months. Buyers will still remain cautious—but those projects that are ‘value for money’, well-located and attractively conceptualised should continue to sell well,” explained Mr. Ismail.

Moving forward, the private property market is expected to remain subdued as the full impact of the property cooling measures is yet to be seen. Sales volumes are likely to stabilise.

Transactional volumes are expected to be around 1,400-1,600 units per month on average for the first half of 2013 as the incentives and discounts are still being offered by developers.
This will probably mae front-page news (again), showing up the ineffectiveness of the cooling measures.

But wait a minute - if demand was driven by first-time buyers who are going after a huge supply of new units being launched, this means this batch isn't affected by the measures anyway.

So perhaps it is premature to say whether the measures are truly effective, or not.
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