New private home sales crashed in December

Statistics from the Urban Redevelopment Authority (URA) showed that new private home sales crashed 50.1 per cent month-on-month in December 2018 to 601 units. In comparison, 1,201 units new private homes sales were made in November.

On a year-on-year basis however, new private home sales climbed 39.7 per cent.

URA noted how Parc Esta reported the most units sold in December with 160 with at a median price of $1,687 psf. It was followed by Whistler Grand with 128 units sold at a median price of $1,327 psf. Rounding up the top five private residential projects for December were Riverfront Residences (47 units sold), Parc Colonial (43 units sold) and Stirling Residences (34 units sold).

Commenting on the new private home sales for December 2018, Ms Tricia Song, Head of Research for Singapore, Colliers International said:

“Despite the sharp drop-off in new private home sales in December against November, the number of units sold last month – 602 (excluding Exec Condos) – was actually quite encouraging considering the absence of any new project launches and the year-end festive period where market activities tend to slow substantially. In fact, it was the highest sales done in the month of December since 1,410 units were sold in December 2012.

Developers’ sales last month fell by 49.9% from November to 602 (excl. ECs), but were up by 39.7% against the 431 units transacted in December 2017. After accounting for units that were returned in the quarter, we estimated the total new home sales for the full 2018 to come in at 8,706 units, down by 17.6% from the 10,566 units in 2017 – broadly in line with Colliers’ forecast. Including ECs, developers sold a total of 605 new units in December.

Home buyers continued to pick up units from projects that were launched in November – notably Parc Esta and Whistler Grand – as well as those from earlier launches. The top-selling private residential projects in December were: Parc Esta which sold 160 units at a median price of SGD1,687 psf; Whistler Grand which moved 128 units at a median price of SGD1,327 psf; Riverfront Residences where 47 units were transacted at a median price of SGD1,313 psf; and Park Colonial which sold 43 units at a median price of SGD1,729 psf.

Projects that have continued to sell well seemed to have found the right pricing formula in the post-cooling measures regime. These projects – Riverfront Residences, Park Colonial, Stirling Residences and The Tapestry – are now seeing total sell-through at 40-65%, while holding prices relatively steady at SGD1,313 – 1,745 psf.

Looking ahead, we expect sales to be supply-led again as the pace and number of new launches continue to dictate takeup rate. In 2019, we estimate that 55-60 projects that make up over 17,000 units could be launched. However, some of these may spill over to 2020 depending on market conditions.

Fourth Avenue Residences, Fyve Derbyshire and RV Altitude have started previews in early January and would be launched in the next few weeks.”

New private home sales are likely to remain fairly subdued in January due to the limited number of launches and the Chinese New Year festivities in February, said Ms Song. She added that other potential projects that could be put on the market in Q1 2019 include: Treasure@Tampines, former Normanton Park and former Amber Park.

Colliers said that in the near-term, it believes demand side factors such as household income growth, job security, household formations should continue to support the private residential market. For 2019, it forecasts that developers could potentially sell 9,500-10,000 new homes given the steady pipeline of upcoming projects.

Commenting on the new private home sales, CBRE said that for the whole of 2018, 9,264 units were sold, a shade paler to last year’s total of 10,566 units which can be partly attributed to the July cooling measures.

It added: “Going forward, benchmark land prices are likely to prop up selling prices. The government intervention and weak sentiments will cause prices to grow on a more moderate and sustainable trajectory. On the other hand, demand will be kept in check with tighter financing requirements as well as higher financing costs in a rising interest rate environment.

As a result, despite the robust pipeline of launches coming onto the market, CBRE expects sales momentum for 2019 to slow down to the underlying demand levels we have witnessed from 2014 to 2016, on the back of global uncertainties and weak sentiments.

This year, we expect developers to focus on clearing their existing inventory. Nonetheless, government land sales will continue to attract developers that have been successful in moving sales over the past 12 months or those who have smaller land banks.”

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