A hefty $32.8 billion worth of private residential properties changed hands in the first six months of this year

A hefty $32.8 billion worth of private residential properties changed hands in the first six months of this year - more than double the $15 billion chalked up in the same period last year.

And the number is just about 9 per cent shy of the record $36 billion for the whole of 2006, according to an analysis of caveats by DTZ Debenham Tie Leung.

Driving the robust first-half showing has been the rapid escalation of private home prices and rising sales activity including collective sales.

DTZ expects the value of private homes transacted for the whole of this year will ’significantly surpass’ last year’s record high.

Despite a slowdown in August, the firm’s executive director Ong Choon Fah expects strong sales in the primary as well as secondary markets in the coming months. She is of the view that confidence in the Singapore property market remains good and that ‘there’s still liquidity here’ despite the sub-prime mortgage problems in the US.

Private apartments and condos accounted for $26.4 billion, or 80 per cent, of the value of H1 2007 private home deals. This is a 126 per cent jump from the same year-ago period, and is close to the $28.8 billion for the whole of 2006.

The average value per non-landed private residential transaction was $1.61 million in H1 2007. This is about 7 per cent higher than the $1.51 million average value per deal for full-year 2006.

‘This was due to the continued interest for high-end residential properties, a significant price increase and rising land values which bolstered premiums achieved in collective sales,’ DTZ said in its report.

The traditional prime districts of 9, 10 and 11 made up slightly over half, or about $13.8 billion, of the total value of non-landed private home transactions in first-half 2007. And DTZ reckons the full-year 2007 figure is very likely to surpass the record $16.2 billion for the whole of 2006.

The average value per transaction for prime district apartments and condos also hit a record $2.84 million in H1 2007, which was 7 per cent higher than the $2.67 million average for the whole of last year.

DTZ’s analysis was based on caveats captured by the Urban Redevelopment Authority’s Realis system dating back to 1995. The analysis showed that the secondary market made up slightly over two-thirds of transaction values for islandwide non-landed homes in H1 2007, and the same was true for the prime districts, in tandem with strong secondary market activity seen in the first half.

The secondary market covers both resale and subsale deals. Resale deals are secondary market deals in projects that have received their Certificates of Statutory Completion, while subsales involve developments that have yet to do so.

In total, $3.5 billion worth of apartments and condos changed hands in H1 2007 in the subsale market, 12 times the $290 million in the same year-ago period.

The H1 2007 subsale value trailed only the $3.9 billion for the whole of 1996, when property speculation was rampant. DTZ expects the full-year 2007 value of subsale apartment and condo deals to exceed 1996’s, supported by rising property prices.

The average value per transaction of subsale apartments and condos was at a record high in H1 2007, at $1.62 million, surpassing the $1.35 million average for full-year 2006.

DTZ’s Mrs Ong is confident about the momentum of private home sales in the coming months in both the primary and secondary markets.

Prices in the secondary market have risen but there’s still a significant price gap between new launches and older properties, even for those that received Temporary Occupation Permits just about a year or so ago. So resale will continue to do well.

In the prime districts, demand for resale properties will also continue to be supported by strong investor interest, as rents increase amidst tight supply in the short term, as numerous sites sold through collective sales will be torn down for redevelopment,’ she says.

‘In the primary market, developers will do well for mass-market project launches. Housing and Development Board resale flat prices have started to recover and this is providing bottom-up support for the property market. In the high-end segment, some niche projects in the prime districts may be relatively small but these are big-ticket items so that will still chalk up the sale value tally,’ Mrs Ong says.

On the US sub-prime mortgage problems, Mrs Ong says: ‘When there is uncertainty, there is a flight to safety and gateway cities like Singapore are perceived to be safer than others,’ she says.

Drop in subsales points to more stable prices ahead.