Mega-projects lead the way in March new home sales

April 16, 2019 12:13 PM SGT
Newly launched mass-market developments dominated the 10 new launches in March, and this segment was led by two major projects, according to URA’s latest statistics for new private home sales in March.
The 2,203-unit Treasure at Tampines sold 289 units with a 59% take-up rate, while the 1,140-unit The Florence Residences sold 77 units that reflects a 38.5% take-up rate. Meanwhile, The Tre Ver, which was launched last August, sold 131 units during the month. Together, these three projects accounted for 47% of March’s private residential sales.
“Palatable price quantums were a key draw; 91.8% of units sold at [Treasure at Tampines and The Florence Residences] were sold at less than $1.5 million, while 98.1% were sold at less than $2 million,” says Desmond Sim, head of research for CBRE Southeast Asia.
Table: JLL, URA
“Despite the ample supply of new launches, buyers continued to dip into previously launched projects - in particular The Tre Ver,” says Tricia Song, head of research for Singapore at Colliers International. “The uptick could be due to potential buyers who were deflected from nearby Park Colonial which is now 72% sold and has started to raise selling prices,” she adds.
The median price at Park Colonial has climbed from $1,756 psf during its launch in July 2018 to $1,828 psf last month.
Not all good news
In total, developers sold 1,054 private residential units (excluding executive condominiums) in March, out of 1,812 units launched for sale. This is an m-o-m increase of 131.6%, and a y-o-y increase of 47.2%.
“The overall sales pace still looks encouraging and relatively spread out, with 12 projects selling more than 20 units in March 2019. This compares favourably with March 2014 after the total debt servicing ratio was implemented, when only five projects sold more than 20 units,” says Christine Li, senior director of research at Cushman & Wakefield (C&W).
However, Ismail Gafoor, CEO of PropNex Realty, sounds a note of caution. “Even though developer sales experienced a higher take-up rate for the month of March, this does not reflect that the overall market sentiment has fully recovered,” he says.
Last month’s overall take-up rate of 58% was the lowest since November 2014, during which 423 units were sold out of 863 units launched, says Colliers’ Song.
Luxury residential market
Meanwhile, prices in the city-centre, or Core Central Region, were “propped up” by Boulevard 88 which sold 26 units out of 35 units launched at a median price of $3,613 psf, reflecting a 74.3% take-up rate, says CBRE’s Sim.
Going by the pick-up in the number of units sold last month, buying sentiment in the super luxury home segment was positive, says Christine Sun, head of research and consultancy at OrangeTee & Tie. Based on URA caveats, 25 new private homes were sold for more than $5 million, and this is “the highest number recorded for a single month since December 2013”, she says.
Boulevard 88 (Picture: City Development Ltd)
The highest priced unit sold in March was a 5,683 sq ft unit at Boulevard 88 that fetched $28 million ($4,927 psf). It is also the highest psf price transacted for a new sale unit since June 2013, which saw a unit at Reignwood Hamilton Scotts transacted for $5,001 psf, says Sun.
Sim expects that developers will likely slow down the pace of new launches to allow unsold inventory to clear from existing new launches. “Launch pipelines could also ease going forward as the major projects (comprising more than 1,000 units) have already been launched,” he says.
However, prices are likely to remain “sticky” as most developers still have the time to sell their unsold units before the five-year deadline for additional buyer’s stamp duty hits, says C&W’s Li.