Developer sales in April plunge 58.1% m-o-m to 301 units sold

With limited units put out in April, buyers dipped into previously-launched projects for new homes, such as The Botany at Dairy Farm, says Wong Siew Ying, head of research and content at PropNex Realty (Photo: Albert Chua/EdgeProp Singapore)

SINGAPORE (EDGEPROP) - The sale of new private residential units (excluding Executive Condos or ECs) sold by developers plunged 58.1% m-o-m in April, from 718 units sold in March to just 301 units last month, according to URA data released on May 15.

This also marks a 66.1% y-o-y decline compared to the same period last year, when developers moved 887 units.

Mohan Sandrasegeran, head of research and data analytics at SRI says that decline in developer sales last month was due to the lack of major new project launches in April. Last month saw only three new launches, namely the 14-unit 32 Gilstead in Novena, 142-unit The Hill @ one-north in Queenstown and the 59-unit The Hillshore in Pasir Panjang.

Based on the latest developer sales data, 278 new units were launched for sale in April, a fall of 68.3% m-o-m from the 877 units released for sale in March.

Wong Siew Ying, head of research and content at PropNex Realty agrees, adding that the new projects are small- to mid-sized developments. “They do not offer a wide selection of units to prospective buyers compared with the bigger projects that were launched in the previous month.”

With limited units put out in April, buyers dipped into previously-launched projects for new homes, such as The Botany at Dairy Farm, which was the top-seller in April, she adds.

Nevertheless, the take-up rate for all three new launches last month was encouraging, says Lee Sze Teck, senior director of data analytics at Huttons Asia. For example, 32 Gilstead sold four out of 14 units launched at a median price of $3,443 psf, while 42 units out of 142 units released for sale were sold at The Hill @ One-North at a median price of $2,614 psf. The Hillshore sold three out of its 59 units at a median price of $2,599 psf.

Leonard Tay, head of research at Knight Frank Singapore observes that the tepid sales numbers reflect homebuyers’ increasingly selective attitude, which no longer shows urgency or a “fear of missing out” that was a feature of the market from 2H2020 to 1H2022. Buyers continue to take their time to identify value opportunities when acquiring suitable properties for owner-occupation that suit their lifestyle preferences, he says.

Tay adds that some buyers have turned to the subsale market for alternatives. Based on URA caveats, the number of subsale transactions have been on the rise since 2023, with a quarterly average of about 324 subsales. This is a 69.2% increase from the quarterly average of 191 units in 2022. Last quarter, the market recorded 377 subsale transaction, and most comprised nearly-completed homes in the Rest of Central Region (RCR) and Outside Central Region (OCR).

“Homebuyers were attracted to the prospect of acquiring almost ready-to-move-in newly minted homes, when measured against the need to wait out a few years of construction after purchasing at a new launch. Thus, homebuyers who have been active in the subsale market have been generally willing to fork out decent premiums for such units,” says Tay.

The Botany at Dairy Farm tops list of projects

The top-selling project in April, in terms of units sold, was The Botany at Dairy Farm which sold 50 out of its 386 units at a median price of $2,004 psf. Based on caveats lodged, the project has sold 87% of its units to date.

Sandrasegeran notes that the robust sales trajectory comes at an opportune time since the Government Land Sales site next to it at Dairy Farm Walk is slated for launch in June. “Given the strong ongoing sales at The Botany, it is likely that the project could be fully sold by the time the new development on the Dairy Farm Walk land parcel is introduced,” he remarks.

The Hill @ one-north is the second best-selling project in April. Sandrasegeran attributes the strong demand the project has seen to the catchment of business parks, academic, and research institutions in the vicinity. He expects this factor to sustain buying demand for this project since it provides a steady stream of potential residents and investors.

The new freehold project, 32 Gilstead, accounted for four of the priciest transactions last month. The highest price was for a 4,209 sq ft unit on the third floor at $14.5 million, or $3,455 psf.

EC units also saw a drop in sales by 55%, from 114 units in March to 51 units in April. The 616-unit North Gaia on Yishun Close topped the list of ECs in terms of sales, selling 33 units at a median price of $1,315 psf. This was followed by Lumina Grand in Bukit Batok West Avenue 5, which saw 18 out of its 512 units sold out. Based on URA’s figures, a total of 329 new EC units remain unsold as at end-April.

Outlook

With the absence of major new launches in the next two months, Lee expects tepid developer sales in May with between 150 and 250 units expected to be sold. Next month will see the launch of two boutique developments – the 21-unit Jansen House on Jansen Road and 16-unit Straits at Joo Chiat in Joo Chiat Place.

Lee also expects that the lukewarm new private home sales will continue into June, as there are unlikely to be any launches that month due to the school holidays. This may bring developer sales in 2Q2024 to about 600 to 700 units, he adds.

Other upcoming new launches over the next few months include the 280-unit Kassia in the Flora Drive, and 440-unit SORA on Yuan Ching Road in the Jurong Lake District. The market is also anticipating the launch of the former Chuan Park and Emerald of Katong.

The Chuan Park is a 916-unit project in Lorong Chuan, with two strata commercial units. It is a redevelopment of the former 444-unit Chuan Park that was sold en bloc to a joint venture between Chinese developers Kingsford Development and MCC Singapore at $890 million in July 2022.

Under the URA Master Plan 2019, the site has a plot ratio of 2.1 with the potential to be redeveloped into a new 900-unit condominium with a gross floor area of 841,236 sq ft, subject to approval from the relevant authorities.

Meanwhile, Emerald of Katong is an 847-unit condo on Jalan Tembusu in Tanjong Katong. It is developed by Sim Lian Group, which was awarded the site after submitting a successful bid of $828.8 million (or $1,069 psf per plot ratio) for it last year. This was just $800,000 or 0.1% more than the only other bid that the site received, which was submitted by a joint venture between City Developments Limited and Frasers Property. The development is near the future Tanjong Katong MRT station on the Thomson-East Coast Line.

Christine Sun, chief researcher and strategist at OrangeTee, expects that the new project launches in the suburbs will maintain their dominant presence in the new sales market as most new project launches are in the RCR and OCR.