Confidence returns to home sales market say real estate observers

Developers sold 821 units in June 2019, the highest June monthly sales since 2013, when 1,806 units were sold in the home sales market. There is continued buyer’s interest in new launches in the home sales market, which saw a pick-up in sales recently.

Despite the implementation of the cooling measures and heightened volatility arising from the escalation of the US-China trade tension, the return of confidence in the home sales market points to sound fundamentals, rising affluence and ample liquidity in Singapore real estate, said Cushman & Wakefield (C&W).

Ms Christine Li, Senior Director of Research for C&W, said, “Investors with a long-term view are fully cognizant of the value that Singapore real estate offers, beyond the vagaries of cyclical price movements and cooling measures. It also helped when developers are more competitive in project pricing in order to keep the sales momentum going.”

C&W noted that interest in the home sales market has piqued at a time of market uncertainty amid escalating trade tensions, as Singapore is viewed as a safe haven for both capital preservation and appreciation.

Ms Li added: “Nonetheless, monthly sales saw a 13.8% decline compared to May’s sales tally. Y-o-y sales were up 25.5%. The stellar performance in June is encouraging because June holidays tend to be a slow month for new home sales due to seasonality.”

There were 4 new launches in June, namely Sky Everton, Lattice One, Seraya Residences and Sloane Residences. Out of the 4 new launches in June, we saw encouraging take-up rates for both Lattice One and Sky Everton, which recorded 40% and 51% sales in the first month of launch.

The top seller for June was Sky Everton, a new launch at Everton Road and sold 134 units in June. The launch was well-received by the market, given a combination of factors: its attractive price tag, freehold tenure, central location and dearth of new launches in the area.

Source: URA, Cushman & Wakefield Research

The Urban Redevelopment Authority’s (URA) developer survey showed that sales jumped 25 per cent Year-on-Year in June with 821 units sold. However on a Month-on-Month basis, sales dipped 13.8 percent. Real estate stakeholders attributed the sales drop in the developer survey to school holidays and a lower number of newer projects launched, with a total of 670 units launched during the month.

For June, total take-up exceeded the number of units launched; a total of 821 units from new launches and existing stock were sold, despite only 670 units launched from four projects.

CBRE commenting on the home sales market said, the “the top selling projects were Sky Everton (134 units), Treasure at Tampines (70 units), and Parc Botannia (60 units).”

Mr Desmond Sim, CBRE’s Head of Research for Southeast Asia, said: “Notably, Sky Everton did well with over 51.1% sold in the first month it was launched. This can probably be attributed to its tenure and location. Buyers were also returning to previously launched projects – including Treasure at Tampines (70 units), Parc Botannia (60 units) and The Florence Residences (48 units). While previous strategies involved incentivising the agents, developers are now taking a more direct approach by incentivising buyers. At the same time, it was observed that some buyers took a longer gestation period to decide on their purchase.”

The developer survey showed that including June’s numbers, a total of 4,348 units have been sold year-to-date, out of 5,497 units launched year-to-date in 2019. CBRE noted that while the June developer survey showed little action in the EC segment, the upcoming Sumang Walk launch – Piermont Grand, will likely be well-received due to pent-up demand and the reputation of the developer.

Mr Sim added: “Despite the measures in place, there seems to be some strength in the market. Should this buying momentum continue, CBRE expects total new sales for this year to come to around 8,000 units, which has been the underlying demand level established over the past six years since TDSR was introduced.”

Ms Tricia Song, Colliers International’s Head of Research for Singapore, commenting on the home sales market said, “the private residential market in Singapore looks to have achieved some semblance of stability a year after fresh cooling measures were imposed in July 2018.”

She added: “Despite June being typically a slower month for property sales – due to the school holidays during this period – developers still sold 821 new private homes (excluding Executive Condos) in the month. June’s sales were 13.8% lower from 952 units sold in May 2019, but developers had launched far more units on the market in May which have helped to push volumes up. On a year-on-year basis, new home sales in June was 25.5% higher than the 654 units sold in June 2018.”

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