Demand for new homes in June - typically a slow month in the Singapore property market due to the school holidays - appeared resilient although developers sold fewer units.
Analysts noted that last month's 13.8 per cent drop in sales from May was not as weak compared with the same month-on-month period in recent years.
Figures released by the Urban Redevelopment Authority yesterday showed that, compared with a year ago, sales last month rose 25.5 per cent to 821 from 654 units booked last year. Including executive condominiums, developers moved 822 units.
Some 670 private homes were launched last month, down nearly 52 per cent from 1,394 in May, and down 7.7 per cent from 726 units a year ago.
But with Singapore's second quarter (Q2) economic growth slumping to its worst showing in a decade, some analysts warned that buying sentiment could sour quickly if there is an external shock, or if the economy continues to worsen in the coming months.
"The question is whether there will be a real recession, how deep is the recession, and whether it will adversely affect the overall investment sentiment for risky assets," said ERA Realty head of research and consultancy Nicholas Mak.
The poorer-than-expected Q2 gross domestic product growth will definitely add more anxiety over job stability, but for now, the job market is still healthy and the interest rate environment is benign with more cuts expected, said Ms Christine Li, head of Singapore and South-east Asia research at Cushman and Wakefield.
"Sales momentum will (likely) continue in (the second half) due to ample liquidity. Nevertheless, competition among new launches has heated up and developers are trying to price projects more favourably," she added.
Mr Ong Teck Hui, JLL's senior director of research and consultancy, said the private residential market has been resilient so far. "Although analysts warned about the possibility of a technical recession, a full year recession is not expected. Buyers may be more cautious, but are unlikely to be kept off the market," he said.
Last month's sales data suggests that the market is stable, he added. "The drop in new home sales from May to June was much lower than the drop in the same period in 2018 (-41.7 per cent), 2017 (-21.1 per cent) and 2016 (-49.3 per cent). This shows that June 2019 is not worse off than in previous years," he said.
Four new projects launched in the month - Sky Everton, Lattice One, Seraya Residences and Sloanne Residence - contributed to 19.2 per cent of total sales last month, said Ms Tricia Song, head of research for Singapore, Colliers International.
Topping the charts was Sky Everton, which moved 134 units at a median price of $2,523 per square foot (psf), while the bulk of last month's sales came from earlier launches.
Buyers remained value-conscious. Treasure at Tampines, Parc Botannia and Parc Esta, which represent some of the cheapest earlier launches near MRT or LRT stations, saw monthly sales pick up last month. Treasure at Tampines moved 70 units at $1,320 psf; Parc Botannia booked 60 units at $1,296 psf and Parc Esta sold 58 units at $1,690 psf.
While previous strategies involved incentivising the agents, developers are now taking a more direct approach by incentivising buyers, CBRE's head of research at South-east Asia Desmond Sim noted.
More new launches are expected ahead of the Hungry Ghost month starting on Aug 1.
