SINGAPORE (EDGEPROP) - Since the easing of circuit breaker restrictions on June 19, sales momentum of private homes has continued to pick up steam. A total of 1,080 new homes (excluding Executive Condominiums or ECs) were sold in July, up by 8.2% from 998 units sold in June and the highest since November last year. The figure is 8.4% lower y-o-y.
Despite the lack of major launches in July, Ismail Gafoor, CEO of PropNex Realty, notes that the market has continued to absorb units from previously launched projects at a pace that is “commendable given the substantial economic headwind from the pandemic”.
He attributes the higher sales figure to “underlying housing demand, ample liquidity in the system, low interest rates, and attractively priced projects”.
Deals were made for balance units at prior projects such as Treasure at Tampines(112 units sold),Parc Clematis (87 units sold), Jadescape (75 units sold) and Daintree Residences (56 units sold), observes Desmond Sim, head of research (Southeast Asia) at CBRE. He attributes the uptick in sales to anecdotal evidence of developer discounts and incentives, as well as a low-interest rate environment.
“Surprisingly, developers did not rush to launch new projects in the month of July before the seventh lunar month kicks in on Aug 19 to Sep 16,” says Ong Teck Hui, senior director of research and consultancy at JLL. The absence of new launches in July shows a hint of caution on the part of developers, he adds. However, some developers appear more confident, he says, pointing to an additional 400 units at Treasure at Tampines and 191 units at Avenue South Residences that were recently released for sale.
Ong notes that in August, Forett at Bukit Timah is the only new launch to date. The project sold 190 units, or 30% out of total units, during a virtual booking day event at an average psf price of $1,880 psf. PropNex’s Gafoor expects sales at Forett at Bukit Timah to “prop up overall new home sales in August”.
Tricia Song, head of research for Singapore at Colliers International, says that as of Aug 9, 543 new sales have been recorded this month. She expects sales to slow down after the 19th as the seventh lunar month is traditionally quieter for property sales.
Surge in sales in CCR
Sales in the Core Central Region (CCR) increased 43% m-o-m. Gafoor observes that this result may be spurred by right pricing strategy at projects including Kopar at Newton, Fourth Avenue Residences, The Avenir, and The M. At Kopar at Newton, one of the more popular launches in the CCR in July, the median transacted price was $2,292 psf in July, which is lower than the median price range of $2,600 to $3,400 psf transacted in District 9’s new launches in 2019, Gafoor observes.
The percentage of local buyers in the CCR has also increased since two years ago, from 48.3% in 2018 to 63.2% in 2019. This year, Singaporeans contributed to 77.8% of total CCR transactions in the first seven months of 2020.
Gafoor says: “This could be because of a pull-back in foreign purchases, following the increase in additional buyer’s stamp duty [ABSD] for foreigners in 2018 and, more recently, the travel bans due to the pandemic.”