January new home sales up 14.9% before local coronavirus outbreak
First published on EdgeProp Singapore by Timothy Tay on 17 February 2020
SINGAPORE (EDGEPROP) - A total of 618 new private residential units (excluding executive condominiums or ECs) were sold last month. This is an increase of 14.9% m-o-m compared to 538 units sold in December last year, and up 41.4% y-o-y, according to the latest statistics by URA.
According to Christine Li, head of research for Singapore and Southeast Asia at Cushman & Wakefield (C&W), “the January 2020 sales figure is encouraging given that the first two months of the year tend to be seasonally lower due to the start of the school term. Notably, this is the highest January sales figure over the last seven years since January 2013, when 2,028 units were sold”.
This January also saw the launch of three new projects – all located in the city centre or Core Central Region (CCR) – namely Leedon Green, The Avenir, and Van Holland. Li says: “New launches in 2020 will be dominated by the high-end market with around half of potential new launches expected to come from the CCR.”
“Even though the economic climate is tumultuous, the number of foreign buyers entering the private property market in the CCR segment has remained stable,” says Ismail Gafoor, CEO of PropNex Realty. He points to data from URA showing an increase of 32.3% m-o-m in the number of private new homes purchased by foreigners last month.
The top-performing project last month was the 1,206-unit JadeScape which launched in September 2018. The development sold 56 units at a median price of $1,690 psf last month. It was followed by Treasure at Tampines which shifted 50 units at a median price of $1,371 psf. Other top-selling developments include Parc Esta which sold 44 units ($1,684 psf), while Parc Botannia and Parc Clematis each transacted 39 units ($1,371 psf and $1,610 respectively).
Nicholas Mak, head of research & consultancy at ERA Realty, notes that last month was the fourth consecutive month where the overall take-up rate exceeded 100%. “This reflected the healthy buying demand and active marketing efforts invested in the launched projects. A high take-up rate also reduces the risk of an oversupply in the primary market,” says Mak.
On the ongoing coronavirus outbreak, Christine Sun, head of research & consultancy at OrangeTee & Tie, says: “There seems to be no major impact on the property market as of now since it is not one of the sectors directly affected by the coronavirus, unlike transport, retail, tourism and Mice (meetings, incentives, conferences and exhibitions).”
Gafoor of PropNex says: “Historically, most crises or downturns do not last long and are short-lived. When the storm calms, the tide of the market re-emerges with pent up demand from buyers and investors.”
Mak adds that a key determinant will be the duration of the outbreak, and market recovery may even start in the quarter after the end of the outbreak. “Some savvy homebuyers may take this opportunity to pick up some properties, especially when the market condition is at its bleakest,” he says.