Spike in EC launches pushes up new home sales

Romesh NavaratnarajahDecember 15, 2014

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An increase in the number of executive condominium (EC) units launched and sold in November 2014 helped to push up new private home sales from the previous month, revealed data from the Urban Redevelopment Authority (URA).

Only 412 private condo units were sold last month, but this figure surged 67 percent to 1,267 units when ECs were included.

Comparatively, 855 units (including ECs) were sold in October 2014, but just 90 came from EC projects due to the lack of any EC launches during that month.

According to URA, property developers launched a total of 2,617 units in November, of which 1,758 were ECs.

Although home sales numbers improved last month from recent months, year-on-year this is still 28 percent lower than the 1,758 units moved in November 2013.

Generally, analysts have been saying the cooling measures implemented by the government, particularly the Total Debt Servicing Ratio (TDSR) framework, have helped to stabilise prices and sales of private units.

But they added that there is still strong underlying demand for residential properties in well-located areas that are priced reasonably.

According to URA, prices as well as the number of units sold during the month are based on the Option to Purchase (OTP) issued by developers to buyers and reported to URA. Not all OTPs result in confirmed sales.

An OTP is a right or option given by the vendor to an intending purchaser to buy the property at a specified price within a specified period of time – the validity period of the option. The intending purchaser must pay a booking fee of between 5 – 10 percent of the agreed price for this right or option. The purchaser has to exercise the OTP within its validity period if he decides to buy the property.

 

Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

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