PHOTO: ST FILE
THE 29.5 per cent month-on-month rise in developers' private home sales in May amid a flurry of nine new project launches - suggests that fears of a trade war do not seem to have dampened property market sentiment too much.
"The concern going forward is the external environment and how it will affect sentiment," said a seasoned property consultant.
"But based on the data so far, I do not think that external factors have filtered through to the market. If they had, the demand would be much weaker and developers would be less gung-ho about launches."
CIMB Private Banking economist Song Seng Wun said: "The macro news flow, either from the local front or regional/global fronts has not been that supportive; there is downside risk to our economic growth. Given this backdrop, our local property market is extremely vulnerable to any shifts in business and consumer sentiment.
"Even if you have a de-escalation in the trade war or geopoltiical tensions, from a Singapore property buyer's standpoint, you still have enough choices given the ample supply of launches coming on-stream. You have time on your side, there's no need to rush. On the other hand, those who need to sell, better 'chop chop'."
In the first five months of this year, developers found buyers for 3,525 private homes, up 2.6 per cent from the same period last year.
This comes on the back of 952 private homes sold by developers in May, up from 735 units in April. Compared with a year ago, the latest figure is down 15.2 per cent.
The pick-up in May sales came as 1,394 private homes were launched, triple the 444 units in April; the number is also higher than the 1,060 units for May last year.
New project launches last month included top-seller Amber Park, with 155 units sold at a median price of S$2,475 psf. The Rest of Central Region or the city-fringe area, where this project is located, dominated launch and sales volumes in May.
The region accounted for about 55 per cent of the total private homes developers released, and 51 per cent of the units they moved during the month.
Colliers International head of research for Singapore, Tricia Song, observed that most buyers remain "price sensitive and value conscious".
ERA Realty Network key executive officer Eugene Lim too noted that price remains a major factor, with 62.5 per cent of homes sold by developers in May priced S$1.5 million and below.
That said, the ultra-luxe segment remained active in May, with penthouse sales at projects such as Amber Park and Boulevard 88.
The action has continued this month, with the sale of the fourth and final penthouse at Boulevard 88 for S$31 million or S$5,125 psf. This is the highest psf price achieved of the 57 units that have been sold to date in the 154 -unit freehold project.
Said Savills Singapore research head Alan Cheong: "Typically, in non-landed housing projects islandwide, the larger the unit, the lower its psf price. But for super-luxe projects, it is the other way around - because uber-high net worth buyers are price inelastic." Agents say that foreign buyers, especially from China, have been active in the high-end segment.
On the whole, developers' private home sales volume could ease slightly in June amid the school holidays when sales activity typically slows, but observers expect activity to pick up again in July - with developers getting ready to roll out a string of projects to take advantage of the sales window before the Hungry Ghost month begins in August.
Developers did not release or sell any executive condominium (EC) units last month. However, all eyes will be on this segment - which is a public-private housing hybrid - soon. City Developments is slated to begin previewing the 820-unit Piermont Grand EC project along Sumang Walk in the Punggol area in a matter of weeks.
Said Christine Li, head of research for Singapore and Southeast Asia at Cushman & Wakefield: "Pent-up demand in the market could spur EC sales in the coming months when Piermont Grand is launched."
JLL senior director of research and consultancy Ong Teck Hui noted that on the whole, new projects accounted for 60 per cent of private homes launched in May, while the remainder were releases from previously launched projects.
He further noted that of the 952 private homes sold in the primary market in May, 70.2 per cent were from previous launches. "This shows that the number of unsold units in previously launched projects is building up, and still offer buyers opportunities in spite of new projects being placed on the market."
URA's data shows that there were 3,491 unsold units in launched private residential projects as at end-Q1 2019, up from 1,066 units a year earlier in Q1 2018.
Commenting on developers' stratgies, CBRE's head of research for Southeast Asia, Desmond Sim, said: "Developers continue to differentiate their projects with unique project features and better finishings. Ultimately, it is a question of how long they can afford to maintain prices at current levels as more launches come onto the market to compete for buyers.
"Should take-up remain at current levels, it is likely that developers might shave off some margins to launch new projects at lower prices, especially those secured in the later stage of the en-bloc cycle."