New home sales fall in October on the back of buyer caution
By Timothy Tay
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - The latest statistics released by URA show that 642 new private residential homes (excluding executive condominiums) were sold in October 2020. This is down 51.7% from the 1,329 units sold in September. The October sales figure is also a decline of 31.1% from the 932 units sold a year ago.
Private residential new home sales for the 10 months to October 2020 are at 8,021 units, which is 4.5% below the 8,401 units transacted in the corresponding period in 2019.
According to Tricia Song, head of research for Singapore at Colliers International, developer sales last month corrected sharply after a five month growth streak as caution set in among home buyers, due to the government’s clampdown on the re-issuing of options to purchase (OTPs) by developers on Sept 28.
During the parliamentary sitting on Nov 2, the Ministry of National Development (MND) disclosed that since January 2019, there had been about 5,500 private housing transactions with the OTPs for the same units re-issued to the same purchasers. Close to 70% of these re-issued OTPs were eventually exercised on average less than six months from the date the first OTP was issued. Only 1% of the re-issued OTPs eventually lapsed.
“The announcement on the re-issue of OTP was a reiteration of existing regulations and not a property cooling measure. Therefore, it is likely to be just a speed bump on the road to recovery from the effects of Covid-19 for the property market,” says Nicholas Mak, head of research & consultancy at ERA Realty.
He adds that most home buyers have the financial means to exercise their OTP on time and can complete their property purchases. “Participants in the real estate market will rapidly come to terms with the restrictions on the re-issue of OTP and life will return to normal,” says Mak.
The best-selling project in October was The Garden Residences, which sold 53 new units at a median price of $1,612 psf. The 613-unit condo was first launched in May 2018 and has sold 82% of its total units by end-October 2020.
This was followed closely by the 2,203-unit Treasure at Tampines, which sold 50 units at a median price of $1,408 psf. The development has sold 72% of its total units. Meanwhile, the 1,450-unit Parc Clematis sold 49 units at a median price of $1,644 psf. The condo has sold 67% of its total units.
“The best-selling private residential projects in October were mostly earlier launches, with some laggards on buyers’ radar, now that the more popular projects are substantially sold or have raised their prices,” says Colliers’ Song.
According to Ismail Gafoor, CEO of Prop- Nex, October’s sales decline was within expectations. “We note that September’s impressive sales were partly driven by new launches including Penrose, Verdale and Myra, but there were limited new launches in October. Therefore, we think the sales tally of 642 units last month is still considered a credible performance — it is a sign of steady confidence in the property market and reflects relatively healthy underlying demand for homes,” he says.
There was only one new project launch last month — that of the 319-unit Hyll on Holland. The freehold development on Holland Road recorded four units sold out of 60 units released for sale when the sales gallery opened for preview and a simultaneous soft launch on Oct 2. By the end of the month, the project only sold one more unit, bringing its sales total to five, at a median price of $2,729 psf.
The 319-unit Hyll on Holland was the only new launch in October. The freehold project sold five units during the month. (Picture: Samuel Isaac Chua/The Edge Singapore)
Buying momentum in the high-end residential segment was likely sustained, says Song. For example, Leedon Green sold nine units at a median price of $2,581 psf in October, while The Avenir transacted three units at a median price of $3,062 psf during the month.
For the whole of this year, PropNex expects developers’ sales to reach 9,500 units, which would be slightly below the 9,912 units transacted in 2019. “The recent run of robust sales in the private and public housing segments, resilient home prices and a gradually recovering Singapore economy have provided a confidence boost for the residential property market,” says Wong Siew Ying, head of research and content at PropNex.
The coming months will likely see more launch-ready projects come onto the market, such as Ki Residences, Clavon and Midtown Modern, says ERA’s Mak. He adds: “There will be new launches in all the three market segments of CCR (Core Central Region), RCR (Rest of Central Region) and OCR (Outside Central Region) in the next two to three months, catering to buyers with different needs and budgets.” This is expected to help sales volume in the primary market recover from the trough in October, says Mak.
Discover more about the Leedon Green, best selling freehold project in prime District 10 here
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