Residential market heats up in 2021

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/ EdgeProp Singapore
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January 8, 2021 6:00 AM SGT
SINGAPORE (EDGEPROP) - New project launches in 2021 swung into high gear with the preview of Normanton Park on Jan 2. The biggest new project launch of the year, with 1,862 units, Normanton Park has set “a positive note” that is expected to carry through to other projects that are also scheduled to preview in January, says Ismail Gafoor, CEO of PropNex. These projects include the 700-unit executive condo, Parc Central Residences at Tampines; as well as the 429-unit The Reef at King’s Dock at Harbourfront Avenue and the 165-unit One-north Eden at One-north Gateway.
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Normanton Park, the biggest launch of 2021, with 1,862 units, kicked off the year with a preview on Jan 2 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Gafoor anticipates 8,000 to 9,000 new private homes could be sold in 2021 — slightly lower than the 9,793 units sold in 2020, based on Realis data. “The lower sales forecast for 2021 is mainly due to fewer large developments that will be launched, as most of the mega projects have already been progressively put on the market in 2017 and 2018,” he adds.
However, 2021 could prove to be the year that much of the “stock clearance” of projects launched in previous years could take place. “The fact that these projects were launched earlier also implies that they are going to complete sooner, which, to home buyers, provides greater certainty compared to a project that is completing five years from now,” says Gafoor. These projects that were launched earlier, especially from 2018 to 2020, are likely to contribute to a greater proportion of new home sales this year.
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Artist's impression of the entrance driveway of the 700-unit Parc Central Residences at Tampines Street 86, the executive condo by Hoi Hup and Sunway Development that opened for e-application on Jan 7 (Photo: Hoi Hup/Sunway)

Prime, city-fringe projects dominate

Prime, freehold projects in the Core Central Region (CCR) tend to see higher participation from foreign buyers. “Sales in the luxury home segment could increase this year, in tandem with more restrictions being lifted, and an expected improvement in the macroeconomy,” notes Christine Sun, OrangeTee & Tie head of research & consultancy. “The increase is likely to be more significant in 2H2021, as an increasing number of people would be vaccinated by then, and travel restrictions eased.”
In the meantime, the residential property market will continue to be driven by Singaporeans and Permanent Residents, notes PropNex’s Gafoor, with sales in the Rest of Central Region (RCR) and Outside Central Region (OCR) to be resilient. “The main concerns for home buyers are the health of the economy and job security,” he notes.
1H2021 is likely to see about 20 new projects launched, according to Huttons Asia. Of these, 32% are located in the CCR, another 47% in the RCR and 21% in the OCR, based on the number of units.
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The residential property market will continue to be driven by Singaporeans and Permanent Residents, notes PropNex’s Gafoor, with sales in the Rest of Central Region (RCR) and Outside Central Region (OCR) to be resilient (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Selling prices to edge up

Lee Sze Teck, Huttons Asia director of research, is forecasting that prices could increase by 3% this year. “Selling prices are expected to edge up because of recent land tender prices and higher construction costs because of Covid-19 safety management measures,” he adds.
As unsold stock draws down in the next few months, developers will be keen to replenish their land bank, notes Lee. However, the sites on 1H2021 government land sales (GLS) programme are concentrated in two areas: one-north and Tampines.
“To satisfy demand in other parts of the island, developers are likely to turn to the en-bloc market, and a new en-bloc cycle may start in 2021,” he adds. “Small and medium sites of up to 500 units may find favour among developers as the development risks are relatively lower.”
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Private residential property prices expected to increase up to 3% this year (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Stronger buying power

December is likely to see more than 1,000 new home sales — the highest sales figure for the last month of the year since 2012, says Lee. This is due to strong sales registered at projects such as Ki Residences at Brookvale and Clavon, which were both launched in December. Ki Residences, launched on Dec 4, saw 171 out of a total of 660 units (26.4%) sold at an average price of $1,786 psf, as at Dec 26. The 640-unit Clavon has sold 472 units (73.8%) at an average price of $1,643 psf as at end-December.
Tricia Song, Colliers International Singapore head of research, expects full-year new home sales in 2020 to be around 9,760 units, just 1.5% below 2019’s 9,912 units. This reflects resilient demand, despite the deepest recession since Singapore gained independence, she says.
With economic recovery expected in 2021, stronger buying power will be partially offset by fewer new launches, adds Song. “Home buyers will likely have to dip into ongoing launches, or purchase in the secondary market,” she notes. “We now expect 2021 developer sales to be around 10,000 units, 2.5% better than 2020.”
Huttons’ Lee expects new launches such as Normanton Park to help push up monthly sales volume, and this will boost sentiment in the property market, he adds.