Developer survey for June shows housing market has stabilised

The Urban Redevelopment Authority’s (URA) developer survey showed that sales jumped 25 per cent Year-on-Year in June with 821 units sold. However on a Month-on-Month basis, sales dipped 13.8 percent.

Real estate stakeholders attributed the sales drop in the developer survey to school holidays and a lower number of newer projects launched, with a total of 670 units launched during the month.

For June, total take-up exceeded the number of units launched; a total of 821 units from new launches and existing stock were sold, despite only 670 units launched from four projects.

CBRE commenting on the developer survey for June said, the “the top selling projects were Sky Everton (134 units), Treasure at Tampines (70 units), and Parc Botannia (60 units).”

Mr Desmond Sim, CBRE’s Head of Research for Southeast Asia, said: “Notably, Sky Everton did well with over 51.1% sold in the first month it was launched. This can probably be attributed to its tenure and location. Buyers were also returning to previously launched projects – including Treasure at Tampines (70 units), Parc Botannia (60 units) and The Florence Residences (48 units). While previous strategies involved incentivising the agents, developers are now taking a more direct approach by incentivising buyers. At the same time, it was observed that some buyers took a longer gestation period to decide on their purchase.”

The developer survey showed that including June’s numbers, a total of 4,348 units have been sold year-to-date, out of 5,497 units launched year-to-date in 2019.

CBRE noted that while the June developer survey showed little action in the EC segment, the upcoming Sumang Walk launch – Piermont Grand, will likely be well-received due to pent-up demand and the reputation of the developer.

Mr Sim added: “Despite the measures in place, there seems to be some strength in the market. Should this buying momentum continue, CBRE expects total new sales for this year to come to around 8,000 units, which has been the underlying demand level established over the past six years since TDSR was introduced.”

Ms Tricia Song, Colliers International’s Head of Research for Singapore, commenting on the developer survey for June 2019 said, “the private residential market in Singapore looks to have achieved some semblance of stability a year after fresh cooling measures were imposed in July 2018.”

She added: “Despite June being typically a slower month for property sales – due to the school holidays during this period – developers still sold 821 new private homes (excluding Executive Condos) in the month. June’s sales were 13.8% lower from 952 units sold in May 2019, but developers had launched far more units on the market in May which have helped to push volumes up. On a year-on-year basis, new home sales in June was 25.5% higher than the 654 units sold in June 2018.”

Colliers noted in their observation of the developer survey:

“All in, developers have sold 4,346 new units from January to June 2019 (up 10.1% YOY) and it looks on track to meet Colliers Research’s forecast of 9,000 units sold for the full-year.

The four new projects launched in June contributed to 19.2% of the total developers’ sales last month. One new launch – Sky Everton topped the charts, while the bulk of the developers’ sales in June came from the earlier launches. We believe Sky Everton did particularly well as it is a rare freehold launch near the city centre and near an upcoming train station. The price point also presents value, compared to some 99-year leasehold property launches.
4 new launches in June 2019

Project Name	Street Name	Locality	Total Number of Units in Project	Units Launched in the Month	Units Sold in the Month		Median Price ($psf) in the Month	Units sold as % of launched
Lattice One	Seraya Crescent	OCR	48	48	19	1,779		40%
Seraya Residences	Seraya Lane	RCR	17	17	1	1,663		6%
Sky Everton	Everton Road	RCR	262	262	134	2,523		51%
Sloane Residences	Balmoral Road	CCR	52	52	4	2,985		8%

Source: Colliers International, URA

Top 10 Selling Projects in June 2019

Project Name	Street Name	Locality	Units Sold in the Month	Median Price ($psf) in the Month	% sold to date of total
Sky Everton	Everton Road	RCR	134	2,523	51%
Treasure At Tampines	Tampines Lane	OCR	70	1,320	21%
Parc Botannia	Fernvale Street	OCR	60	1,296	80%
Parc Esta	Sims Avenue	RCR	58	1,690	44%
The Florence Residences	Hougang Avenue 2	OCR	48	1,442	15%
Stirling Residences	Stirling Road	RCR	33	1,804	57%
The Tre Ver	Potong Pasir Avenue 1	RCR	31	1,628	79%
The Woodleigh Residences	Bidadari Park Drive	RCR	31	1,802	18%
Riverfront Residences	Hougang Avenue 7	OCR	30	1,307	71%
Parc Komo	Upper Changi Road North	OCR	28	1,482	38%

Source: Colliers International, URA

June’s sales were led by new launch Sky Everton which moved 134 units at a median price of SGD2,523 psf. Other private residential projects which did well included: Treasure at Tampines which sold 70 units at a median price of SGD1,320 psf; Parc Botannia which transacted 60 units at a median price of SGD1,296 psf; Parc Esta which shifted 54 units at a median price of SGD1,690 psf; and The Florence Residences where 48 units were sold at a median price of SGD1,442 psf.

Buyers continue to be value-conscious. In fact, some earlier projects such as Treasure at Tampines, Parc Botannia and Parc Esta, representing some of the cheapest launches near MRT or LRT stations, saw monthly sales pick up from May’s 33-50 units to 58-70 units in June.

Taking stock, a year since the cooling measures were announced on 5 July, large projects such as The Stirling Residences (1,259 units), Riverfront Residences (1,472 units), Affinity at Serangoon (1,052 units)  and Park Colonial (805 units), which were launched in June and July 2018, have sold 548 -1,052 units respectively. They appear to be on a cruising mode, moving 18-33 units a month, as sell-through rates sailed past 52-80%.

Outlook Based on Developer Survey

Although the private residential market has stabilised somewhat since the July 2018 measures, we note that there may potentially be some macroeconomic headwinds ahead, with slowing global growth and the weaker economic outlook in Singapore. That said, there are still factors that are supportive of home sales. These include the more favourable interest rate environment and still stable job prospects domestically. For super-luxury projects in the city centre, there appears to be increased interest from foreign buyers, as Singapore remains a safe haven for real estate investments.

We should expect a flurry of new launches in the weeks ahead as developers look to roll out projects before the start of the Hungry Ghost month from 1 August. Potential launches in the months ahead could include: in the CCR, Haus on Handy (188 units), Jervois Prive (45 units), Midtown Bay (219 units); city fringe projects: Avenue South Residence (1,074 units), One Pearl Bank (774 units), Amber Sea (132 units), and suburban projects: Parc Clematis (1,468 units), Midwood (564 units), and Piermont Grand Executive Condominium (820 units).

Given that most buyers remain price sensitive and value-conscious, we expect developers to adopt a prudent pricing strategy.

With the upcoming pipeline of new launches, we think new home sales would likely trend higher in July, before dipping in August. We still expect a full year takeup of 9,000 units (excluding ECs), barring a widespread economic downturn. ”

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