New private residential sales in Singapore posted a strong rebound last month, jumping 75.5% from 277 units sold in April to 486 units in May, based on the latest sales figures from the URA. Including executive condominium (EC) units, new home sales over the same period increased by 73.7% from 293 units to 509 units.
In April this year, property sales took a beating as market activity was hindered by measures to contain community spread of Covid-19. The move saw the closure of showflats, which still remain closed, and homebuyers and agents have had to rely on virtual home viewings to make purchase decisions.
The sales volume last month is 48.9% lower than the 952 new private residential units sold in the same period last year. Over the first five months of this year, developers have sold 2,912 new private residential units which translates to a 17.4% decline from the 3,527 units sold over the corresponding period last year.
Last month, projects in the suburbs, or Outside Central Region (OCR), chalked up the most number of new home sales, with 256 new private units sold. Meanwhile, city-fringe areas, or the Rest of Central Region (RCR), recorded 189 new home sales, and developments in the Core Central Region (CCR) pulled in 41 new sales.
Between April and May, developer sales in the RCR and OCR more than doubled 145.5% and 161.2% respectively. The increase in sales mainly comprised suburban projects, with Treasure at Tampines, Parc Clematis, The Florence Residences, and Parc Esta leading the way.
URA sales data also shows that the median price of units transacted last month fell by 15.3% from about $1.43 million at the start of the year to $1.21 million. According to Desmond Sim, head of research, Southeast Asia, at CBRE: “Anecdotal evidence has also pointed to some developer discounts and incentives which may have helped to give buyers the final push, particularly for those who have been waiting on the sidelines, possibly from the end of last year.”
One example is listed property developer Bukit Sembawang Estates, which launched a circuit breaker promotion over the weekend of June 6–7 for some available units at its luxury 8 St Thomas development. According to a Bukit Sembawang spokesperson, 12 units were sold during the weekend promotion. Half of the buyers were locals, with foreigners making up the other half.
Developer Prominent Land also offered discounts for the remaining units at its boutique, 27-unit, freehold development, 38 Jervois. The units were offered for sale by expressions of interest, with discounts of 13% to 24% from the list prices.
On top of attractive prices, Lim says that the lower interest rate environment is also a much needed jolt, adding that “uncertainties and fluctuation in the equities and bond markets may have also motivated some buyers to look back into residential properties, which have long been regarded as a safer haven”.
According to Nicholas Mak, head of research and consultancy at ERA Realty, the sales figure in May is remarkable, given the lack of new project launches which typically drive monthly new home sales. He adds that most developers are waiting to launch their new residential projects when showflats are allowed to reopen.
Mak says that most home buyers adopted a “wait-and-see” approach and largely put off their purchase plans when the circuit breaker measures were imposed from April 7. “When the government extended the partial lockdown into May and showflats continue to remain closed during One of the partial lifting of the circuit breaker, some buyers may feel that there is no point to continue to put off their home buying plans,” says Mak.
Mak of ERA expects the full-year sales figure to range from 6,500 to 8,000 units sold, still lower than the 9,912 units transacted in FY2019.
Meanwhile, PropNex CEO Ismail Gafoor says the sales volume could come in at 7,000 to 7,500 units transacted, “barring a second wave of infections and widespread job losses”. He adds: “We believe developers’ sensitive pricing strategy, the low interest rate environment, and the long-term prospects of the property market in Singapore will continue to underpin demand for choice homes.”
Upcoming new projects include Forett @ Bukit Timah by Qing Jian Realty, as well as Penrose by City Developments and Hong Leong Holdings’ Intrepid Investments.