New home sales performance dampened by absence of major new launches

Given the absence of major new launches, re-tightened safe management measures from 27 Sep 2021 and the seventh lunar month which lasted until 6 Sep 2021, new home sales performance eased 31.4% m-o-m to 834 units

new home sales performance

September’s developer sales (excluding ECs) fell 31.4% m-o-m to 834 units. On a year-on-year basis, it is also down 37.2% as September 2020’s developer sales benefitted from the major launch of Penrose and two other new launches.

Including ECs however, 1,296 new homes were sold, a marginal 2.0% m-o-m and 6.4% y-o-y decline. Developer sales (including ECs) were bolstered by the launch of Parc Greenwich which sold 68% or 335 of its 496 units at a median price of $1,229 psf, reflecting HDB upgraders’ robust appetite for attractively priced EC units.

Mr Paul Ho, chief officer at iCompareLoan, said: “In 2019, the Government revised the income ceiling for ECs from $14,000 to $16,000, this widened the demand pie for ECs, as more marginal buyers became more incentivised to enter into the EC market.”

“This surely benefitted the new home sales performance in the EC market,” he added.

Given the absence of major new launches, re-tightened safe management measures from 27 Sep 2021 and the seventh lunar month which lasted until 6 Sep 2021, September’s developer sales (excluding ECs) eased 31.4% m-o-m to 834 units.

Developer sales year-to-September now stands at 10,111 units, surpassing 2020’s full volume of 9,982 units and a 37.0% increase from the 7,379 units moved over the corresponding period last year.

new home sales performance
Top 10 Selling Projects in September 2021 (including EC) (Image: URA, CBRE)

Commenting on the new home sales performance for September 2021, Ms Tricia Song, Head of CBRE‘s Research for Southeast Asia, said: “In the absence of major new launches, the bulk of developer sales (96.5%) came from previous projects.”

The month of September saw two new launches, Bartley Vue and Jervois Mansion, both small projects with less than 150 total units each. 28 out of the 115 units launched at Bartley Vue were sold at a median price of $1,927 psf, while Jervois Mansion saw just one unit launched and sold at $2,372 psf.

The bestselling project in September was Normanton Park which sold another 78 units at a median price of S$1,832 psf. The project continued to benefit from its attractive pricing relative to other RCR projects and its good location.

Other top selling previously launched projects include Parc Clematis which sold another 60 units at a median price of S$1,715 psf and Leedon Green which sold another 37 units at a median price of $2,729 psf.

New home sales performance by regions

By market segments, 356 units were sold in the Outside Central Region (OCR), followed by the Rest of Central Region (RCR) and Core Central Region (CCR) which sold 310 and 168 units respectively. Despite the fall in OCR sales to 356 units, OCR sales still fell within the normal range for a month with no new OCR launches, which averages at 350 units in 2021 so far. Sales momentum in the CCR also picked up marginally from July and August.

OCR or the proxy for the mass market segment made up 42.7% of total sales (excluding ECs), compared to 59.3% in Aug 2021. The RCR or city fringe projects made up (excluding ECs) 37.2%, compared to 28.2% in Aug 2021. CCR or a proxy for the high-end segment made up the remaining 20.1% of total sales (excluding ECs) in September, compared to 12.5% in Aug 2021.

New home sales performance to be driven mostly from ongoing projects

Ms Song added, “We expect to see healthy new home sales in the next few months, albeit to come mostly from ongoing projects with few large launches for the rest of the year.”

“In the higher-end segments, CanningHill Piers, the residential component of the Liang Court redevelopment, targeted to launch in the fourth quarter of 2021, could also ride on the continued interest for integrated developments.

The Singapore Government recently announced the addition of nine more countries to its Vaccinated Travel Lane (VTL) programme, including the US, UK, South Korea and Canada. This is a development conducive to the return of foreign demand. Furthermore, as Singapore transitions into endemic living, COVID-19 curbs would no longer pose a headwind for developer sales. As such, we expect the momentum in the housing market to remain positive.

With YTD tally already exceeding 2020’s full year take-up, we expect 2021 new developer sales to come in between 11,000 – 12,000 units. Following URA Q3 2021 flash estimates, with prices up 5.1% year-to-September, barring any unforeseen circumstances, CBRE Research expects private home prices to rise by 6 – 8% for the full year, in line with the 2021 GDP forecast of 6 – 7%.”

Tricia Song, CBRE

Written by Ravi Chandran

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