SINGAPORE (EDGEPROP) - In August, 1,256 new private homes (excluding ECs) were sold, an 16.3% increase m-o-m and 11.8% increase y-o-y. It is the highest in 11 months, since September 2019. New home sales increased for the fourth consecutive time since the “circuit breaker” lockdown in April.
Including ECs, 1,307 new homes were sold, an increase of 14.4% m-o-m, says Christine Sun, head of research and consultancy at Orange Tee & Tie. She describes the new home sales result as bucking the trend as the seventh lunar month, when the Hungry Ghost Festival is observed, started on Aug 19.
In the first eight months this year, developers have sold an estimated 6,198 new private homes, just 4.5% lower than that in the same period last year, notes Ong Teck Hui, senior director of research & consultancy at JLL.
Although retrenchment rates are high, those in stable employment in "bright spot" sectors such as technology, biomedical and precision engineering have higher confidence in purchasing a property despite the recession, says Ong.
“Another factor is homebuyers’ perception that, at worst, prices may just soften slightly and it may not be worthwhile to wait and hope for a major price correction,” Ong adds, pointing to the 0.3% increase in the URA private residential price index in the 2Q2020.
Lee Sze Teck, director of research at Huttons, also says that the strong performance could be attributed to “genuine buying demand generated by the low interest rate environment, lack of alternative stable investment assets and the fear of missing out”.
Source: Colliers International, URA. CCR: Core Central Region; RCR: Rest of Central Region; OCR: Outside Central Region.
In August, there were three new projects put on the market: Forett At Bukit Timah, Mooi Residences and Noma. Private new home sales in the Rest of Central Region (RCR) and Outside of Central Region (OCR) continued to form the bulk of purchases last month.
Freehold new launches Forett at Bukit Timah and Noma in the RCR propped up overall new home sales. According to Ismail Gafoor, CEO of PropNex, they lifted sales in the RCR to 622 units, which accounts for nearly half of the total new home sales in August.
Tricia Song, head of research at Colliers International, attributes the performance of Forett at Bukit Timah to its freehold land tenure and competitive price point of $1,933 psf. “Efficient layouts meant that the median price works out to be $1.45 million per unit, which fits in the sweet spot for most families,” she adds.
As for the 50-unit Noma, a freehold development that sold 34 units or 68% of total units within a weekend, the bulk of the sales were below $1 million per unit, which are affordable to investors to singles and couples, says Song.
In the OCR, 506 units were sold. Gafoor says that sales in the OCR continues to fuel the primary market given its broad demand base of owner occupiers and HDB upgraders.
Meanwhile, in the Core Central Region (CCR), 128 units were sold, up from 113 units in July. CCR sales saw an uptick for a third consecutive month, observes Leonard Tay, head of research at Knight Frank.
Colliers’ Song notes that the high-end segment is seeing a “slow and steady momentum”. The Avenir, a 376-unit in District 9, moved another 12 units at a median price of $3,027 psf, a 6.7% cut from the median price of $3,245 in January. She also observes that the highest psf prices came from two units at Cuscaden Reserve at $3,915 psf and $4,192 psf. Boulevard 88 sold one unit at $3,763 psf.
Huttons’ Lee projects that in September, new launches Verdale, Myra and Penrose will push up developer sales to a record high. “Together with sales of 3,862 units in 1H2020, developers are expected to sell more than 7,000 units in the first nine months of 2020 and possibly 9,000 units for the whole year,” he adds.
PropNex’s Gafoor also concurs, “Based on our projection, new home sales could reach between 9,000 and 9,500 units in 2020, or about 4% to 9% lower than the 9,912 new homes sold in 2019.”
In August, 1,582 new units were launched, almost twice the 869 units launched in July. Knight Frank’s Tay foresees that more developers will gear up to launch their projects in the remaining months of 2020.
In terms of buyer’s nationality, the current property market is “buoyed by strong domestic demand,” says Orange Tee & Tie’s Sun. In August, Singaporeans accounted for 84.4% of all new non-landed home sales.
At the same time, new homes bought by non-Singaporeans are also on the increase. The number of new non-landed homes bought by Singapore PRs rose to a two-year high with 139 transactions, while non-PR purchases hit a seven-month high with 54 units last month.
Check out the latest listings near: Mooi Residences ,The Avenir, Noma, Cuscaden Reserve, Boulevard 88, Verdale, Myra and Penrose