New home sales plunge as launches held back over CNY

Feb's 645 units sold a 60.5% fall from Jan; sales momentum set to pick up in March

Visitors at the preview of Normanton Park in January. Overall, there were 167 new homes launched for sale last month - a record low since December 2018, when 101 units were placed on the market.
Visitors at the preview of Normanton Park in January. Overall, there were 167 new homes launched for sale last month - a record low since December 2018, when 101 units were placed on the market. PHOTO: KINGSFORD HURAY DEVELOPMENT

New home sales took a breather last month following January's stellar performance, as developers held back new launches due to the Chinese New Year holiday.

Developers sold 645 private homes in February, a 60.5 per cent drop from the 1,632 units sold in January, and a 34 per cent fall year on year. It is the lowest sales for the month of February since February 2018, when 384 units were booked.

In comparison, new private home sales notched the highest January figure in eight years as developers went all out with new launches. These included Normanton Park and The Reef at King's Dock, which together accounted for more than 50 per cent of all units sold that month.

With January's boost, developer sales in the first two months of this year came to 2,277 units - 42.7 per cent higher than in the same period last year before the Covid-19 pandemic became a serious economic threat, analysts say.

The figures from the Urban Redevelopment Authority exclude executive condominium (EC) units - a public-private housing hybrid. Including ECs sold, developers moved 756 new homes last month - down 64 per cent from January and 42.5 per cent lower than a year ago.

Developers sold 111 EC units last month, down from 489 in January, and 339 in February 2020.

February's new home sales figures do not suggest slowing demand, as the resale market remained fairly buoyant with 1,039 units transacted - just 16.6 per cent lower than in January, said Mr Ong Teck Hui, senior director of research & consultancy at JLL, citing URA Realis data.

This is also higher than the average monthly resale volume of 894 units last year, he added.

With the improving economic outlook and gradual vaccine roll-out, sales momentum should pick up in March. Already, 173 new sales have been caveated in the first seven days of this month, noted Ms Tricia Song, head of research for Singapore, Colliers International.

Upcoming major projects include Midtown Modern and One Bernam in the Central Business District, as well as The Atelier at Newton, Irwell Hill Residences near Orchard Road and Peak Residence in Thomson Road.

These launches should help to lift sales in the prime or core central region, which has held its own despite the pandemic and economic downturn. Last year, developers sold 1,260 new homes in the prime district - the strongest annual sales performance in recent years, said Ms Wong Siew Ying, head of research and content at PropNex.

PropNex chief executive Ismail Gafoor noted that many mega projects that accounted for a large chunk of new home sales last year have pared down unsold stock. For instance, Treasure at Tampines, Parc Clematis and Jadescape - the top three sellers last year - are now about 80 per cent, 74 per cent and 94 per cent sold, respectively, he said.

The 2,203-unit Treasure at Tampines crossed the 80 per cent sales mark within two years of its launch in March 2019, reflecting strong upgrader demand, Ms Song said.

The 167 new homes launched for sale in February were a record low since December 2018, when 101 units were placed on the market. Developers launched 82 per cent fewer new units last month, compared with a year ago.

"Developers seem to be in no hurry to launch more units as the market is on their side, with prices trending upwards," Mr Ong said.

Only one project was placed on the market last month - the 14-unit J@63, a freehold development in the suburbs or outside central region. One unit sold at a median price of $1,406 psf.

Last month's take-up was led by projects in the city fringe or rest of central region (RCR) with 325 units sold, followed by 262 units taken up in the suburbs and 58 units in the prime district, JLL said.

The top seller was The Reef at King's Dock, followed by Normanton Park, Treasure at Tampines, Midwood and Amber Park.

Demand remains strong for city fringe and suburban projects, with a sweet spot of $1 million to $1.6 million per unit. "61.7 per cent of total developer sales in February were at the median price of $1,000-$2,000 psf, compared with 74.1 per cent in January," Ms Song said.

After topping the charts in January with sales of 645 units (restated from 625) at a median price of $1,762 psf, Normanton Park's sales slowed to 61 units at a median price of $1,800 psf last month.

"Based on the caveats lodged, the bulk of the sales were two-bedders, with an average size of 760 sq ft and average price quantum of $1.36 million per unit," she added.

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A version of this article appeared in the print edition of The Straits Times on March 16, 2021, with the headline New home sales plunge as launches held back over CNY. Subscribe