August new home sales surprise with strong showing
September 20, 2019
Developers moved 1,122 new private homes in the traditionally quiet month of August, down by just 4.8 per cent from the 1,179 units sold in July, as demand remained resilient despite the weaker macro-economic environment.
Last month’s sales numbers were boosted by new launch Parc Clematis and sales at projects that were launched earlier. More than 70 per cent of units sold last month were from previous launches, as most developers avoided launching new projects during the Hungry Ghost month. Parc Clematis was launched two days after the festival ended.
Also helping to buoy sales was the “lower-for-longer” interest rate environment.
August’s strong performance – the second-highest in a year after July – could encourage developers to continue launching more projects this month. Developer sales were up a whopping 82 per cent from the 617 units sold in August last year, the first month after the July 6 property cooling measures took effect.
Last month, developers launched 979 units, up 7.5 per cent from 911 units in July, and up 83 per cent from 534 units in August last year.
The data released by the Urban Redevelopment Authority yesterday excludes executive condominium (EC) units, which are a public-private housing hybrid. Including ECs, developers sold 1,167 units last month, down 25 per cent from 1,557 units in July. This was up 82.3 per cent from 640 private homes and EC units sold in July last year.
“Adverse news on the 0.1 per cent gross domestic product growth in the second quarter and the Ministry of Trade and Industry’s downgrading of 2019’s GDP forecast… do not seem to have an appreciable impact on the private home market so far,” JLL’s senior director of research and consultancy Ong Teck Hui said.
“For the first eight months of the year, the estimated 7,381 private residential units launched is 20.4 per cent higher than the same period last year, while the estimated 6,489 units sold is 3.2 per cent higher year on year,” he said.
The sales momentum at some of the earlier launches has picked up pace. That could be because as new launches go on the market “at ben-chmark prices within their given localities, prices at earlier-launched projects may start to look attractive to some buyers”, said Ms Tricia Song, head of research for Singapore, Colliers International.
For instance, The Florence Residences last month clocked the best monthly sales of 122 units since its launch in March this year, possibly as buyers warmed up to competitive pricing, she said. Its median price of $1,438 per sq ft in August – similar to its median price of $1,434 psf during launch month – looks relatively attractive compared with Parc Clematis’ $1,615 psf, she noted. Both projects are in the suburbs, or outside central region.
The slight dip in last month’s sales volume from July is within expectations as no new EC projects were launched last month, whereas the 820-unit EC project, Piermont Grand in Punggol, was launched in July, said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.
Given the higher income ceiling, revised from $14,000 to $16,000, Mr Desmond Sim, CBRE’s head of research for South-east Asia, expects stronger demand for ECs, as marginal buyers may now be incentivised to jump in, which could further boost sales at the Punggol project, and also for Parc Canberra, expected to launch by the year end.