According to the Urban Redevelopment Authority of Singapore, only 377 private homes were sold and transacted (excluding executive condominiums) in February. Analysts indicate that the drop in 28% drop in sales, from the 524 units sold in January, was attributed to the Chinese New Year festivities where developers held back their launches. The lack of inventory and supply for real estate private homes thus resulted in a drop in the hype and build up for potential purchase.
Ms Tan Siew May, a potential home-owner and buyer in the first quarter of 2018, spoke out to us that she is “waiting for an upcoming launch Margaret Ville in Queenstown before looking at other areas”. It seems that many buyers are waiting out this dull season before proceeding to dive into the property market, especially when most showrooms are currently unavailable.
In fact, there were only two new launches.
- Parksuites, a 119-unit project by Far East Organization in Holland Grove, soft-launched 50 units and sold three at a median price of S$2,215 psf.
- Nim Collection, a 99-year leasehold landed development, launched 26 units and sold three units as well, at a median price of S$1,661 psf.
Making a comparison with past year, Ong Teck Hui, national director of research & consultancy at JLL, said Feb 2018’s figures were actually comparable to those in January 2017 – the Chinese New Year month last year. with some 108 units launched and 382 units sold then.
“So the low-key performance in February is not indicative of a market slowdown,” he added. “Notwithstanding the festive period in February and the dearth of new launches, buyers were still house-hunting among previously launched projects, resulting in sales from these accounting for 98.4 per cent of total new private home sales during the month. This is indicative of ongoing interest among home buyers.”
Developers are not sitting back this period either. It was noted that the average psf for previously launched projects have rose, and they are expected to continue to time their launches to benefit from a further recovery in residential prices.
For example, median prices at Kingsford Waterbay at in Upper Serangoon have increased from S$1,111 psf in March 2015 to S$1,349 psf in Feb 2018. Grandeur Park Residences near Tanah Merah MRT has also seen its median price rise from S$1,406 psf at launch in March 2017 to S$1,487 psf in Feb 2018, as it reaches its 90-per-cent sold mark.
Year-on-year, sales suffered a 61.5% drop from the 979 units sold in Feb 2017. This is mainly due to the lack of ECs as there will only be two EC launches combined in both 2018 and 2019.
This also means the depleted supply was part of the main cause of the drastic fall in sales.
It is noteworthy to observe that the recent EC – Hundred Palms Residences that is situated at Yio Chu Kang Road, faced a high demand as the 531 units were sold out just under 7 hours last year. Excluding Rivercove Residences which is yet to be launched, there were only 212 unsold EC units in projects under marketing. This is only a small fraction of the 2,514 unsold EC units being marketed one year ago.
Analysts expect home buyers and upgraders to move quickly to purchase existing stocks of available EC units especially before prices start to increase, as anticipated to after the government sold the Sumang Walk EC site to a City Developments joint venture at a record land price of S$583 psf per plot ratio, which could translate to a break-even cost of close to $1,000 psf for its completed units.
If the market sentiment continues to remain sanguine through the year, the primary market sales could range between 11,000 and 14,000 private housing units in 2018.