Plunge in new private home sales in December

Prospective buyers at the Riverfront Residences showroom in July last year, just before the July 6 cooling measures kicked in. The development in Hougang was among the top-selling new home projects last month.
Prospective buyers at the Riverfront Residences showroom in July last year, just before the July 6 cooling measures kicked in. The development in Hougang was among the top-selling new home projects last month.ST FILE PHOTO

Absence of new launches and typical year-end marketing slowdown cited as factors, but figure up 40% from a year ago, URA data shows

Developers in Singapore sold 602 private homes last month, about half the 1,201 units they moved in November, due to the absence of new project launches and the typical slowdown in marketing activity during the year-end holidays.

The figures were released by the Urban Redevelopment Authority yesterday based on its survey of licensed housing developers.

A total of 101 private homes from existing launches were released last month - down 92 per cent from the bumper 1,342 units in November, and down 56 per cent from the 231 units released in December 2017. This is the lowest number of new private homes launched since September 2017, JLL senior director of research and consultancy Ong Teck Hui noted.

Of the 101 units launched, 100 were from Affinity at Serangoon, OrangeTee & Tie research and consultancy head Christine Sun noted.

But there is a silver lining. The number of units sold last month - 602 excluding executive condominium (EC) units - was quite encouraging, up nearly 40 per cent from the 431 units sold in December 2017. It was the highest sales done in the month of December since 1,410 units were sold in December 2012, Ms Tricia Song, Colliers' head of research for Singapore, noted.

Meanwhile, only three new EC units were sold in December last year. But the entire year saw 628 new EC units launched and 1,137 sold. Said Mr Ong: "The supply and demand imbalance caused median prices to jump nearly 25 per cent from $793 per sq ft (psf) in the fourth quarter of 2017 to $989 psf in the fourth quarter last year."

Among the top-selling new home projects last month were Parc Esta along Sims Ave and Whistler Grand along West Coast Vale. Other top sellers - Riverfront Residences in Hougang, Park Colonial in Upper Serangoon, Stirling Residences, and The Tapestry in Tampines - are "seeing total sell-through at 40-65 per cent, while holding prices steady at $1,313-$1,745 psf", Ms Song said.

While high land prices are likely to support new home prices, the latest round of cooling measures, higher financing costs and tighter financing requirements will likely cap price growth at a more moderate pace, said Mr Desmond Sim, CBRE's head of research, Singapore & South-east Asia.

Last year, developers launched 8,773 private new homes, up from 6,020 units a year ago. They sold 9,264 units (excluding EC units), down from 10,566 units in 2017.

  • 602

  • Number of private units - excluding EC units - sold last month, up nearly 40 per cent from the 431 units sold in December 2017.

But things are not too dire. About 40 per cent of developer sales were transacted in the last five months of last year, indicating encouraging demand despite the July 6 cooling measures, more curbs on shoebox units being built in certain locations, rising interest rates, and the ongoing trade spat, Ms Sun said.

About 5,415 units were launched in the second half of last year, 61 per cent more than in the first half. This is partly due to expectations of a large launch supply hitting the market this year. Mr Ong expects the launch momentum to carry over into this year when 10,000 to 12,000 new private homes could be launched. Among them are Fourth Avenue Residences in Bukit Timah, Fyve Derbyshire along Derbyshire Road, and RV Altitude along River Valley Road, which began previews this month and will be launched in the coming weeks.

While sales are expected to remain subdued ahead of Chinese New Year, launches are likely to pick up after that, with The Florence Residences in Kovan and Treasure@Tampines expected to launch in the first quarter.

A version of this article appeared in the print edition of The Straits Times on January 16, 2019, with the headline 'Plunge in new private home sales in December'. Print Edition | Subscribe