New launches, looser Covid-19 restrictions may boost new home sales ahead: analysts | Singapore Property News

New launches, looser Covid-19 restrictions may boost new home sales ahead: analysts

15 Jun 2021
Property News
DEVELOPERS in Singapore sold nearly 30 per cent fewer private homes in May compared with April, with sales dampened by stricter safe-distancing measures meant to curb rising Covid-19 cases here, as well as fewer launches.

But analysts expect new home sales to pick up as restrictions are easing. 

Mark Yip, CEO of Huttons Asia, said there is room for sales in June to match May’s numbers. "The relaxed Covid-19 measures of up to five in a group may see pent-up demand translate into actual sales,” he said.

He and Ismail Gafoor, chief executive officer (CEO) of PropNex, also anticipate upcoming launches -  namely The Watergardens at Canberra, Klimt Cairnhill and Parc Greenwich EC - to push sales to rebound in July.

Meanwhile, with many HDB flat owners selling their flats in recent months, the upgrader demand is also expected to remain strong, likely boosting the new sales market, said Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.

In May, the number of new private homes sold stood at 891, down from April's 1,268, URA data showed on Tuesday.

Phase 2 (Heightened Alert), which took place from May 16 to June 13, saw a reduced occupancy capacity for galleries to one person per 16 square metres, and restricted social gatherings to groups of two including the property agent.

“Most developers with unlaunched projects have pushed back their launch activities till after June 13, some even to July, said PropNex's Mr Gafoor.

Some 514 new private homes were placed on the market in May, less than half of that launched in the previous month, excluding ECs.

He added that some prospective buyers may also prefer to stay at home as much as possible to reduce transmission risk.

Including executive condominiums (ECs), which are a public-private housing hybrid, sales reached 1,230 units, easing 8.8 per cent from 1,348 in April. This is the second consecutive month-on-month fall, after April inched down 2.2 per cent.

That said, Tuesday's data was higher than consultants' flash estimates published by The Business Times on June 12.

Huttons' Mr Yip noted that the difference in sales before and after the added restrictions were not significant, as the industry was more prepared to cope with disruption.

Analysing caveats before and after the tighter measures were introduced, he noted that 55.3 per cent of sales were in the period from the first half of May, while 44.7 per cent of sales took place from in the second half of the month.

After adjusting for the launches of One Bernam and Park Nova, the sales split is 51.2 per cent in the first half of May and 48.8 per cent in the second half of May. 

May's drop in sales was also not as drastic as a year earlier during the circuit breaker period, noted Ms Sun.

The month saw a 83 per cent gain from the 487 homes sold in the corresponding month in 2020. Still, this year's sales are 6.4 per cent shy of that in May 2019.

Including ECs, the month's figures more than doubled from the 510 homes sold in May 2020.

Ms Sun said: “The sales performance was stronger this year as the property sector seems to be more prepared to ensure business continuity and more flexibility in changing its mode of customer engagement.”

She added that many developers and sales agents were able to switch to remote viewings quickly.

"Buyers were also getting more customised to the use of the virtual and augmented reality that has digitalised the home buying experience and made online searches more seamless and accessible."

The top selling project last month was Provence Residence located at Canberra Crescent. With 229 units sold at a median price of S$1,155, it made up some 67.6 per cent of new EC sales in May.

Last month’s 339 new EC units sold were also more than quadruple from the 80 transacted in the previous month, according to PropNex.

Excluding ECs, sales of homes found in the outside of central region led the month, accounting for 45 per cent of sales. This was followed by the rest of central region, which attributed some 33.6 per cent.

Lastly, the core central region (CCR) contributed the least of new home sales in May, with roughly 21.4 per cent. However, it comprised the top best selling non-EC project in the month, One Bernam.

The project saw 83 units sold at a median price of S$2,471 per square foot (psf). It alone accounted for 43.5 per cent of sales in the CCR.

The CCR also saw the launch of ultra-luxury project, Park Nova, which housed the most expensive apartment sold last month.

The 20th floor penthouse went to an ultra-high net worth individual (UHNWI) for S$34.4 million or S$5,838 per square metre, according to Huttons.

This placed it as the third priciest new condominium purchase based on URA caveat records from 1995, noted OrangeTee & Tie.

Together, the two projects contributed to about 11 per cent of the monthly total.

Source: The Business Times
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