Comments on URA home sales for August 2020

SINGAPORE, 15 September 2020 -- 

Tricia Song (宋明蔚), Head of Research for Singapore at Colliers International:

Residential developer sales continued to defy economic gravity in August as pent-up demand fueled the second straight month of sales over 1,000 units.

This is also the most robust monthly sales since September 2019, despite the start of the traditionally quiet period of the Lunar Seventh Month – commonly known as Ghost Month – on 19 August.

One of the reasons could be attractively-priced freehold project launches. Data released by the Urban Redevelopment Authority of Singapore (URA) on Tuesday, 15 September, showed that 1,256 new private homes, excluding Executive Condos (ECs) were sold in August, up by 16.3% month-on-month (MOM) from the 1,080 units that were shifted in July 2020.

On a year-on-year (YOY) basis, developers’ sales rose 11.8% from the 1,123 units (excl. ECs) transacted last August 2019. This brings private home sales (excl. ECs) in year-to-August to 6,198 units, down just 4.5% compared to the 6,490 units sold in the first eight months last year.

In August, developers sold 51 ECs – which are a hybrid of public and private housing – 17.7% less than the 62 ECs sold in July, but 13.3% more than the 45 ECs sold in August 2019. This brings total developer sales (including ECs) in August 2020 to 1,307 units, up 14.4% MOM and 11.9% YOY.

Top 10 Selling Projects in August 2020 (including EC)

Source: Colliers International, URA
* CCR: Core Central Region; RCR: Rest of Central Region; OCR: Outside Central Region 

The best-selling private residential projects in August were:

• Forett at Bukit Timah which moved 213 units at a median price of S$1,933 psf;
• Treasure at Tampines which sold 109 units at a median price of S$1,364 psf; and
• Parc Clematis which sold 87 units at a median price of S$1,665 psf.

3 New Launches in August 2020

Source: Colliers International, URA
* CCR: Core Central Region; RCR: Rest of Central Region; OCR: Outside Central Region 

There were three new project launches in August – Forett at Bukit Timah, Noma and Mooi Residences – which made up 19.1% of total sales in August (incl. ECs).

Of the new launches, Forett at Bukit Timah sold 213 units or 34% of its total 633 units in its first month of launch, a rather outstanding performance, probably due to the freehold land tenure and competitive price point of S$1,933psf. Efficient layouts meant that median price quantum per unit works out to be S$1.45 million, which fits in the sweet spot for most families.

Noma, a freehold boutique development of 50 units at Geylang, sold 34 units or 68% within a weekend after it offered early-bird discounts, with one-bedroom units starting at S$600,000 and two-bedroom units starting at S$900,000. The bulk of the sales were below S$1 million per unit, which are affordable to investors and singles/couples.

Analysis

The strong sales in August pointed to yet-satiated pent-up demand as well as confidence in the property market, which have gone against the worsening economic conditions and rising unemployment.

August’s sales also signalled buyers’ propensity for “value” as attractively-priced freehold city fringe projects garnered the most interest.

With attractive launches in the city fringe, the Rest of Central Region (RCR) made up the bulk of sales (excl. ECs) in August at 49.5% (July 2020: 38.8%). Outside Central Region (OCR) or the proxy for the mass market segment made up 40.3% of total sales, compared to 50.7% in July 2020.

We estimate 81% of the total developer sales in August 2020 were priced at the median price of S$1,000-2,000 psf, compared to 83% in July 2020.

The slow and steady momentum in the high-end segment appeared to be sustained. In the luxury segment, The Avenir moved another 12 units at a median price of S$3,027 psf, a 6.7% cut from the median price of SGD3,245 in January 2020. The highest achieved per-square-foot price came from two units at Cuscaden Reserve at S$3,915 and S$4,192 psf. Boulevard 88 sold one unit at S$3,763psf.

Outlook

We note that with the strong developer sales, some of the better-performing projects have seen prices move up, such as Stirling Residences which has now crossed S$2,000 psf. This is likely to motivate buyers to consider other comparable projects which have lower prices.

Upcoming major projects in the pipeline include 566-unit Penrose at Sims Avenue, 640-unit Clavon at Clementi Avenue 1 and 396-unit The Landmark.

We now expect 2020 developer sales to fall about 15% to 8,400 units from the 9,912 units in 2019. With home prices highly correlated to household income and job security, we expect private residential prices could decline 5% in 2020, in line with the economic contraction.

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Media Contact:

Annabelle Taylor