Property developers, under pressure from a substantial pipeline, pushed out nine new projects last month following a lull in April, but the bulk of last month's sales came from earlier launches, analysts say.
Developers sold 952 units, up nearly 30 per cent from 735 units in April, but down 15 per cent from the 1,122 units booked in May last year. This is according to figures released by the Urban Redevelopment Authority (URA) yesterday.
Of last month's total sales, 70.2 per cent were from previous launches. "This shows that unsold units in previous projects are building up (but) still offer buyers opportunities. URA Realis data shows 3,491 unsold units in launched private residential projects as at the first quarter of this year, up from 1,066 units a year ago," noted JLL's senior director of research & consultancy Ong Teck Hui.
The Woodleigh Residences, an earlier launch, was among top sellers last month after its median price was cut to $1,823 per sq ft (psf) from around $2,000 psf at its initial launch in November last year, analysts noted.
"Despite tighter margins, we believe this move has helped drive sales, with 74 units sold in May, versus 29 sold during its initial launch. Hence, low or slow take-up rates could encourage developers to price more conservatively against the market," said Credit Suisse analyst Louis Chua. Also boosting Woodleigh's sales were more attractive commissions paid to agents, analysts said.
Developers sold 3,525 new private homes (excluding executive condos) in the first five months of the year, up 2.6 per cent from 3,436 units in the same period last year.
Meanwhile, 1,394 private homes were released for sale last month, more than triple the 444 units in April, and up 32 per cent from 1,060 units launched a year ago.
Mr Ong said: "Due to the pressure of a substantial pipeline of units for sale, developers can be expected to continue launching their projects to secure buyers."
Should take-up remain at current levels, it is likely that some developers may launch at lower prices, especially for projects yet to be launched, as well as those secured in the later stage of the collective sale cycle, said CBRE's head of research for Singapore and South-east Asia Desmond Sim.
The nine new launches accounted for 29.8 per cent of total sales last month, with two - Amber Park in East Coast and Parc Komo in Changi - topping the charts with their attractive freehold pricing.
Amber Park's plus points include its project design, boasting the largest recreational space among new projects in the East Coast and Katong area, and its proximity to the upcoming Thomson-East Coast MRT line, said Ms Tricia Song, head of research for Singapore at Colliers International.
Parc Komo, or the former Changi Garden, is near the future Changi Aviation Hub and Cross Island Line MRT, she added.
Mr Ong noted the median prices of between $1,340 psf and $1,497 psf "for suburban projects like Parc Komo, The Florence Residences and Treasure at Tampines are within the means of many entry-level buyers".
Projects in the city fringes or rest of central region are also doing well: 51.3 per cent of the units were sold in the city fringes last month, up from 43.7 per cent in April.
"This is also the first time this year that the mid-tier segment saw the highest sales volume among all market segments," said Ms Christine Li, head of research for Singapore and South-east Asia at Cushman & Wakefield.