HomeAbout UsMediaNew home sales down 28.1% in Jan, but expected to rise with more new launches in the coming months
New home sales down 28.1% in Jan, but expected to rise with more new launches in the coming months
First published on EdgeProp Singapore by Bong Xin Ying on 15 February 2019
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.
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.
“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.
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).
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.”