New home sales down 28.1% in Jan, but expected to rise with more new launches in the coming months

By Bong Xin Ying

/ EdgeProp Singapore |

February 15, 2019 8:35 PM SGT

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Private residential units sold by developers excluding Executive Condominiums (ECs) fell 28.1% month-on-month (m-o-m), from 602 units last December to 433 units in January, according to URA data released on Feb 15.

Meanwhile, 498 new private homes were launched in January, nearly four times more than the 101 units placed on the market in December 2018 and about twice that launched in January last year, says Ong Teck Hui, JLL senior director of research & consultancy.

Crowd on the launch weekend of Fourth Avenue Residences on Jan 19-20 (Credit: Allgreen Properties)

The three new projects launched last month -- Fourth Avenue Residences, RV Altitude and Fyve Derbyshire-- were all located in the Core Central Region (CCR). These three projects also accounted for almost 25% of January’s sales, notes Lee Sze Teck, head of research at Huttons Asia.

Top Selling Projects in January 2019
Project Name	Street Name	Units Sold	Median Price ($psf)*	% sold to date**
Fourth Avenue Residences	Fourth Avenue	74	2,412	16%
Affinity At Serangoon	Serangoon North Avenue 1	54	1,496	34%
Parc Esta	Sims Avenue	32	1,745	30%
Stirling Residences	Stirling Road	22	1,761	41%
Parc Botannia	Fernvale Street	21	1,384	65%
RV Altitude	River Valley Road	19	2,858	14%
Riverfront Residences	Hougang Avenue 7	18	1,321	58%
The Tre Ver	Potong Pasir Avenue 1	18	1,615	36%
Whistler Grand	West Coast Vale	18	1,368	35%
Mayfair Gardens	Rifle Range Road	17	1,939	58%
Source: Colliers International, URA
* Median price for the month of Jan
** % sold to date

Source: Colliers International, URA

“The fact that the three new projects were launched in Jan reflects developers’ confidence in launching units in the upper price segment where the pool of buyers is more limited,” adds JLL’s Ong. “The stable market in Jan could be a prelude to healthy launches and sales in the coming months.”

The healthy demand for these new luxury homes bodes well for the luxury market as more than 4,000 new homes could be launch-ready this year, notes Christine Sun, head of research and consultancy at OrangeTee and Tie. “There were more Singaporeans buying luxury homes last month,” she adds. “The increased number of luxury homes sold indicate that buyers are generally still upbeat about the market here given that household incomes have risen across the board last year and our gross domestic product (GDP) is still positive.”

In terms of pricing, all the new launches in Jan probably set benchmark prices in their respective localities. For example, Fourth Avenue Residences set the benchmark price of $2,412 psf for a 99-year leasehold project in the Bukit Timah enclave, notes Tricia Song, Colliers International head of research for Singapore.

For the other existing launches, developers have kept their selling prices stable, especially for those which have yet to cross the 60% to 70% sell-through mark, adds Song.

Crowd at Fyve Derbyshire at the launch weekend on Jan 19-20 (Credit: Roxy-Pacific Holdings)

The monthly decrease in new home sales could be attributed to a lack of new launches in the Rest of Central Region (RCR) and Outside Central Region (OCR), reckons JLL’s Ong. “Sales volume is usually higher when large-scale projects are launched in the OCR and RCR where “prices tend to be lower - compared to luxury homes - and more buyers can afford these homes.”

Apart from Fourth Avenue Residences, other top selling projects last month were: Affinity At Serangoon (54 units sold at a median of $1,496psf); Parc Esta (32 units sold at a median of $1,745psf); Stirling Residences (22 units sold at a median of $1,761psf) and Parc Botannia (21 units sold at a median of $1,384psf), according to Eugene Lim, key executive officer of ERA Realty.

Many projects are slated to be launched in the coming weeks including Florence Residences and the biggest development ever launched - Treasure @ Tampines (See Table of New Launches in 1Q2019).

Upcoming Launches in 1Q2019
Project Name	Location	Tenure	No. of Units	Expected Preview Date
Nyon @ 12 Amber	Amber Road	Freehold	92	15-Feb
The Florence Residences	Hougang Avenue 2	99 years	1,410	16-Feb
1953	Tessensohn Road	Freehold	58	23-Feb
Boulevard 88	Orchard Boulevard	Freehold	154	March
Treasure At Tampines	Tampines Street 11	99 years	2,203	March
Parkwood Collection	Lorong 1 Realty Park	99 years	53	March
Uptown @ Farrer	Perumal Road	99 years	116	March
Former Normanton Park	Normanton Park	99 years	2000*	March
Former The Wilshire	Farrer Road	Freehold	85	March / April
Former Katong Omega Apartments	East Coast Road	Freehold	36	March / April
* Estimated number of units

* Estimated No. of Units; Source: ERA Research

According to ERA’s Lim, new home sales in 2019 will be “supply-driven”, and developers – while not under any significant pressure to cut prices – are well aware that they have to “price their units realistically” to achieve respectable sales in the initial stages of launch so as to sustain “a good momentum” going forward.

Meanwhile, buying demand is resilient but “selective” as buyers choose to focus on the projects’ value proposition, he adds.

Christine Li, Cushman & Wakefield’s senior director of research, expects take-up rate for new homes to range from 8,500 to 9,500 units this year. She estimates a pipeline supply of 75 new projects with a total of 25,000 new units for launch this year.

“The Singapore residential market has more or less adjusted to current cooling measures, and there is lesser ambiguity on when cooling measures will be lifted,” adds Li. “Furthermore, developers still have a substantial timeframe to sell their units as most of their sites were acquired in 2017 or 2018, so we do not expect huge discounts in the market.”

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