Developer survey for June shows housing market has stabilised

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Author: Ravi Philemon

The Urban Redevelopment Authority’s (URA) developer survey showed that sales jumped 25 per cent Year-on-Year in June with 821 units sold. However on a Month-on-Month basis, sales dipped 13.8 percent.

developer surveyReal estate stakeholders attributed the sales drop in the developer survey to school holidays and a lower number of newer projects launched, with a total of 670 units launched during the month.

For June, total take-up exceeded the number of units launched; a total of 821 units from new launches and existing stock were sold, despite only 670 units launched from four projects.

CBRE commenting on the developer survey for June said, the “the top selling projects were Sky Everton (134 units), Treasure at Tampines (70 units), and Parc Botannia (60 units).”

Mr Desmond Sim, CBRE’s Head of Research for Southeast Asia, said: “Notably, Sky Everton did well with over 51.1% sold in the first month it was launched. This can probably be attributed to its tenure and location. Buyers were also returning to previously launched projects – including Treasure at Tampines (70 units), Parc Botannia (60 units) and The Florence Residences (48 units). While previous strategies involved incentivising the agents, developers are now taking a more direct approach by incentivising buyers. At the same time, it was observed that some buyers took a longer gestation period to decide on their purchase.”

The developer survey showed that including June’s numbers, a total of 4,348 units have been sold year-to-date, out of 5,497 units launched year-to-date in 2019.

CBRE noted that while the June developer survey showed little action in the EC segment, the upcoming Sumang Walk launch – Piermont Grand, will likely be well-received due to pent-up demand and the reputation of the developer.

Mr Sim added: “Despite the measures in place, there seems to be some strength in the market. Should this buying momentum continue, CBRE expects total new sales for this year to come to around 8,000 units, which has been the underlying demand level established over the past six years since TDSR was introduced.”

Ms Tricia Song, Colliers International’s Head of Research for Singapore, commenting on the developer survey for June 2019 said, “the private residential market in Singapore looks to have achieved some semblance of stability a year after fresh cooling measures were imposed in July 2018.”

She added: “Despite June being typically a slower month for property sales – due to the school holidays during this period – developers still sold 821 new private homes (excluding Executive Condos) in the month. June’s sales were 13.8% lower from 952 units sold in May 2019, but developers had launched far more units on the market in May which have helped to push volumes up. On a year-on-year basis, new home sales in June was 25.5% higher than the 654 units sold in June 2018.”

Colliers noted in their observation of the developer survey:

“All in, developers have sold 4,346 new units from January to June 2019 (up 10.1% YOY) and it looks on track to meet Colliers Research’s forecast of 9,000 units sold for the full-year.

The four new projects launched in June contributed to 19.2% of the total developers’ sales last month. One new launch – Sky Everton topped the charts, while the bulk of the developers’ sales in June came from the earlier launches. We believe Sky Everton did particularly well as it is a rare freehold launch near the city centre and near an upcoming train station. The price point also presents value, compared to some 99-year leasehold property launches.
4 new launches in June 2019

Project Name Street Name Locality Total Number of Units in Project Units Launched in the Month Units Sold in the Month Median Price ($psf) in the Month Units sold as % of launched
Lattice One Seraya Crescent OCR  48  48  19  1,779 40%
Seraya Residences Seraya Lane RCR  17  17  1  1,663 6%
Sky Everton Everton Road RCR  262  262  134  2,523 51%
Sloane Residences Balmoral Road CCR  52  52  4  2,985 8%

Source: Colliers International, URA

Top 10 Selling Projects in June 2019

Project Name Street Name Locality Units Sold in the Month Median Price ($psf) in the Month % sold to date of total
Sky Everton Everton Road RCR 134  2,523 51%
Treasure At Tampines Tampines Lane OCR 70  1,320 21%
Parc Botannia Fernvale Street OCR 60  1,296 80%
Parc Esta Sims Avenue RCR 58  1,690 44%
The Florence Residences Hougang Avenue 2 OCR 48  1,442 15%
Stirling Residences Stirling Road RCR 33  1,804 57%
The Tre Ver Potong Pasir Avenue 1 RCR 31  1,628 79%
The Woodleigh Residences Bidadari Park Drive RCR 31  1,802 18%
Riverfront Residences Hougang Avenue 7 OCR 30  1,307 71%
Parc Komo Upper Changi Road North OCR 28  1,482 38%

Source: Colliers International, URA

June’s sales were led by new launch Sky Everton which moved 134 units at a median price of SGD2,523 psf. Other private residential projects which did well included: Treasure at Tampines which sold 70 units at a median price of SGD1,320 psf; Parc Botannia which transacted 60 units at a median price of SGD1,296 psf; Parc Esta which shifted 54 units at a median price of SGD1,690 psf; and The Florence Residences where 48 units were sold at a median price of SGD1,442 psf.

Buyers continue to be value-conscious. In fact, some earlier projects such as Treasure at Tampines, Parc Botannia and Parc Esta, representing some of the cheapest launches near MRT or LRT stations, saw monthly sales pick up from May’s 33-50 units to 58-70 units in June.

Taking stock, a year since the cooling measures were announced on 5 July, large projects such as The Stirling Residences (1,259 units), Riverfront Residences (1,472 units), Affinity at Serangoon (1,052 units)  and Park Colonial (805 units), which were launched in June and July 2018, have sold 548 -1,052 units respectively. They appear to be on a cruising mode, moving 18-33 units a month, as sell-through rates sailed past 52-80%.

Outlook Based on Developer Survey

Although the private residential market has stabilised somewhat since the July 2018 measures, we note that there may potentially be some macroeconomic headwinds ahead, with slowing global growth and the weaker economic outlook in Singapore. That said, there are still factors that are supportive of home sales. These include the more favourable interest rate environment and still stable job prospects domestically. For super-luxury projects in the city centre, there appears to be increased interest from foreign buyers, as Singapore remains a safe haven for real estate investments.

We should expect a flurry of new launches in the weeks ahead as developers look to roll out projects before the start of the Hungry Ghost month from 1 August. Potential launches in the months ahead could include: in the CCR, Haus on Handy (188 units), Jervois Prive (45 units), Midtown Bay (219 units); city fringe projects: Avenue South Residence (1,074 units), One Pearl Bank (774 units), Amber Sea (132 units), and suburban projects: Parc Clematis (1,468 units), Midwood (564 units), and Piermont Grand Executive Condominium (820 units).

Given that most buyers remain price sensitive and value-conscious, we expect developers to adopt a prudent pricing strategy.

With the upcoming pipeline of new launches, we think new home sales would likely trend higher in July, before dipping in August. We still expect a full year takeup of 9,000 units (excluding ECs), barring a widespread economic downturn. ”

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