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Author: Ravi Philemon
New private homes sale fell 30.2 per cent in April from the previous month, according to data released by the Urban Redevelopment Authority (URA) on May 15. The developers new private homes sale fell following a sharp drop in the number of units launched.
Excluding executive condominiums, developers in Singapore sold 735 units last month compared to the 1,054 units sold in March. The number of units launched fell sharply by 75.5 per cent, with 444 units in April compared to the 1,812 launched the previous month. On a year-on-year basis, home sales went up marginally by 0.3 per cent.
Commenting on URA data which showed that new private homes sale fell last month, CBRE said that faced with a plethora of choices, buyers are observed to be taking a longer time to make their home buying decisions.
CBRE said: “Despite being mired by global trade tensions and weakened sentiments, some buyers are eventually won over by competitive pricing. In April 2019, 444 new units were launched from three projects and a total 735 units (from new launches and existing stock) were sold.’
Mr Desmond Sim, CBRE’s Head of Research for Southeast Asia, said: “The top selling projects were the Tre Ver (81 units), Parc Botannia (61 units), as well as Treasure at Tampines and Stirling Residences with 51 units sold each. Evidently, mass market launches are propping up sales, with 96.2% of sales coming from previous launches. Median prices have been reduced at some projects, and this has probably contributed to a pickup in sales at these projects.”
He added: “Including April’s numbers, a total of 2,573 units were sold, out of 3,433 units launched in 2019. This is reflective of the weaker sentiments pervading the market, as compared to the same period last year when 2,360 units were sold out of only 1,732 units launched.”
CBRE noted that although new private homes sale fell last month, in the high-end market, Boulevard 88 continues to do well with 20 units sold in April at a median price of S$3,655 psf.
Mr Sim said, “in the EC segment, 8 units were sold at Rivercove Residences and 1 unit from Northwave.” He added, “all eyes will be on the next highly anticipated EC launch at Sumang Walk, which is likely to be launched soon.”
“Even though ABSD sell-by deadlines are still a few years away, it seems that developers and buyers have reached a stalemate. With the supply overhang in the market, it is more likely that developers will have to capitulate to reducing prices and shaving part off their margins to entice buyers. It has also been observed that the reputation and track record of developers play a critical role in buyers’ decisions. Nonetheless, an affordable pricing quantum remains the main sell.”
Colliers International said that new private homes sale fell last month as developers took a breather in April following the blitz of new launches in March where 10 new projects were put on the market. Colliers noted that this was the lowest number of units launched since 101 units were rolled out by developers in December 2018.
Ms Tricia Song, Colliers’ Head of Research for Singapore, said “most buyers continued to be price sensitive and value-conscious, with the lowest priced projects in OCR – Parc Botannia, and the lowest-priced in RCR – The Tre Ver topping the charts. On the other hand, super luxury Boulevard 88 also continued to do well, selling 20 units at median price of SGD3,655 psf, after selling 26 units in March 2019.”
She added: “As some of the projects crossed 70% total takeup, we watch for developers raising prices. We note Park Colonial’s median price has risen about 5% to SGD1,839 psf in April, from SGD1,756 psf during its launch in July 2018.”
In forecasting the future following news that new private homes sale fell last month, Colliers said that it expects takeup to remain relatively healthy in the coming months as more projects could potentially be launched.
For the whole of 2019, Colliers Research estimates that 9,000 new residential units (excluding ECs) could be sold, up slightly from the 8,795 units in 2018, on attractive launches line-up tempered by cautious buying sentiment post-cooling measures.
Colliers added that the announcement of an additional $9 billion in investment from the city’s two integrated resorts could boost gross domestic product growth and employment, spurring confidence in the property market and attracting foreign interest.
It estimates that overall private home prices could stabilise in H2 2019, and rise by 1% for the full year 2019. Colliers said supporting factors that could hold up prices in the coming quarters include: halt in interest rate increases, continued benign economic growth, and en bloc beneficiaries buying replacement homes.
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