July 2020 URA home sales data shows continued steady-clip

July 2020 URA home sales data shows residential developers’ sales continuing at a steady clip, crossing the 1,000 mark to hit the highest monthly sales since November 2019

July 2020 URA home sales data released on Monday, 17 August, showed that 1,080 new private homes excluding Executive Condos (ECs) were sold in July, up by 8.2% month-on-month (MOM) from the 998 units that were shifted in June 2020.

On a year-on-year (YOY) basis, developers’ sales declined 8.4% from the 1,179 units (excl. ECs) transacted in July 2019. This brings private home sales (excl. ECs) in year-to-July to 4,942 units, down just 7.9% compared to the 5,367 units sold in the first seven months last year.

July 2020 URA home sales data showed developers sold 62 ECs – which are a hybrid of public and private housing – 87.9% more than the 33 ECs sold in June, but 83.6% less than the 378 ECs sold in July 2019 (Piermont Grand launch). This brings total developer sales (including ECs) in July 2020 to 1,142 units, up 10.8% MOM and -26.7% YOY.

There was no new project launch in July. The bulk of the sales last month still came from earlier-launched projects.

Ms Tricia Song, Head of Research for Singapore at Colliers International, commenting on the July 2020 URA home sales data said: “After a surprise rebound in June, residential developers’ sales in July continued at a steady clip, crossing the 1,000 mark to hit the highest monthly sales since November 2019. Buyers bought more new private homes in July than in June, as July benefitted from a full month of reopening under Phase 2 after showflats reopened from 19 June.”

According to July 2020 URA home sales data the top three selling projects in June remained the most popular in July.

The best-selling private residential projects in July were:

• Treasure at Tampines which moved 112 units at a median price of S$1,344 psf;
• Parc Clematis which sold 87 units at a median price of S$1,649 psf; and
• The Florence Residences which moved 78 units at a median price of S$1,559 psf.

These three mega projects, with 1,410 to 2,203 units each, have reached the 57% – 62% sales mark.

Top 10 Selling Projects in Julye 2020 (including EC)

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

Analysis from July 2020 URA home sales

Colliers analysing the July 2020 URA home sales said, “The MOM increase in July pointed to yet-satiated pent-up demand, which had bucked the macroeconomic trends. Singapore’s Q2 gross domestic product (GDP) shrank by 13.2% YOY and 42.9% QOQ (seasonally adjusted annualised), the worst quarter on record.”

“Nonetheless, we recognise that not all buyers are affected equally and some jobs are relatively resilient, such as those in technology, financial services and healthcare services. Affordability remains key as the Outside Central Region (OCR) or proxy for the mass market segment continues to make up the bulk of the sales at 50.7% of total sales, compared to 49.0% in June 2020.

Buyers are generally still price sensitive – we estimate 83% of the total developer sales in July 2020 were priced at the median price of S$1,000-2,000 psf, compared to 86% in June 2020.

Momentum in the high-end segment appeared to be maintained. In the luxury segment, The Avenir moved 11 units at a median price of S$2,992 psf, a 7.8% drop from the median price of S$3,245 in January 2020. Cuscaden Reserve sold three units at a median price of S$3,622 psf while Boulevard 88 sold two units at a median price of S$3,489psf.

However, we note that foreign (non-resident) buying has slowed down in July, as only 3.2% (or 34) of new sales caveats in July were lodged by foreign buyers, compared to 4.9% (or 47) in June. Singaporeans and Permanent Residents (PRs) made up over 96% of the buyers.”

Outlook Prediction based on July 2020 URA home sales

Ms Song said, “as of 9 August, 543 new sales have been recorded in August. Sales could slow down after 19 August as the lunar Seventh Month or the Ghost month kicks in, during which is traditionally quieter for property sales.”

“Freehold 633-unit Forett at Bukit Timah, located in the Rest of Central Region (RCR), has reportedly sold 30% or 190 units on August 8 during a virtual booking day event at an average price of S$1,880 psf.

We believe the 30% sell-through on its first day was better than expectations given the current climate, and should encourage developers to launch more projects in the coming months albeit at sensitive price points.

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 expect 2020 developer sales to fall about 20% to 7,900 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.”

Mr Paul Ho, chief mortgage officer at iCompareLoan, said, “the July 2020 URA home sales data showed a 0.3% increase in transactions. The prices of developers’ sales have also been relatively stable in the second quarter. These data will give developers confidence to launch more new projects in the remaining half of the year.”

He added, “traditionally, the 3rd Quarter is the busiest for developers’ sales, but I think the volume will not pick up so quickly going forward.”