Private new home sales dropped off sharply to 602 units (excluding executive condos) in December 2018, down 39.7% from the previous month. Still, the data was “quite encouraging” in the absence of new project launches and given the typical year-end lull during the festive period, says Tricia Song, Colliers International head of research for Singapore. It was the highest sales recorded in the month of December since 2012, when 1,410 units were sold, she says.
Only 101 new private homes from existing launches were put up for sale in December, a 92.5% drop from the previous month and a 56.3% fall y-o-y. It was the lowest number of new private homes launched since September 2017, says Ong Teck Hui, JLL senior director of research and consultancy.
For the whole of 2018, developers launched 8,773 private residential units compared to 6,020 in 2017, says JLL.
If returned units in 4Q2018 are taken into consideration, the year could end with 8,706 units sold instead of 9,264 units, reckons Colliers’ Song. This would mean new home sales in 2018 would have contracted further by 17.6% instead of 12.3% from 10,566 units in 2017.
Increased pace of new launches
The momentum of new launches was higher in 2H2018 — accounting for 5,415 units (61%) — compared to 1H2018. “The increased momentum of launches was partly due to the prospect of a large launch supply entering the market in 2019. It led developers to launch their projects and secure sales before the year ended,” notes JLL’s Ong. “We can expect the launch momentum to carry over into 2019 when 10,000 to 12,000 new private homes could be launched.”
Projects launched in November continued to be popular in December, hence the two top-selling projects last month were Parc Esta (160 units sold at a median price of $1,687 psf); and Whistler Grand (128 units sold at a median price of $1,327 psf). The third best-seller in December was Riverfront Residences, with 47 units sold at a median price of $1,313 psf, followed closely by Park Colonial, with 43 units sold at a median price of $1,729 psf.
“Developers of projects that have sold well seem to have found the right pricing formula in the post-cooling measures regime,” says Colliers’ Song. Projects like Riverfront Residences, Park Colonial, Stirling Residences and The Tapestry have achieved sales rates from 40% to 65%, with prices relatively steady in the range of $1,313 to $1,745 psf.
According to CBRE Research, the three top-selling new launches in 2018 were: Riverfront Residences (825 units sold out of a total of 1,427 units), The Tapestry (556 of 861 units sold), and Twin View (454 out of 520 units sold).
New home sales are expected to continue to be “supply-led” with the pace of new launches to dictate take-up rates. In 2019, Colliers expects 55 to 60 new projects with a total of about 17,000 units to be launched. Some of these new launches could spill over to 2020, depending on market conditions, notes Song.
The new launches this month are in the prime districts of 9, 10 and 11: the 476-unit Fourth Avenue Residences by Allgreen Properties; the 71-unit Fyve Derbyshire and the 140- unit RV Altitude, both by Roxy-Pacific Holdings.
“New home sales are likely to remain fairly subdued in January due to the limited number of launches and the Chinese New Year festivities in February,” notes Song.
Other potential projects that could be put on the market in 1Q2019 include the 1,410-unit Florence Residences, the 2,203-unit Treasure@ Tampines, the former Normanton Park (about 1,900 units) and the former Amber Park (616 units), say property consultants.
Colliers’ forecast is that developers could sell 9,500 to 10,000 new homes given the steady pipeline of upcoming projects.
“While prospective buyers have been more cautious, the demand for Singapore residential properties remains strong,” says Tan Tee Khoon, Knight Frank executive director and head of residential project marketing. Tan reckons there will be “potential upside in prices, as trade tensions and wider economic risks are expected to be resolved”.