New private residential property sales increase as foreclosures rise

According to the developers’ sales survey by the Urban Redevelopment Authority for February, new private residential property sales rose 4.4 per cent month-on-month (m-o-m) to 455 units in February. Including executive condominium (EC) units, there were 457 new private residential property sales last month, registering a 4.6 per cent m-o-m increase.

On a year-on-year basis, new private residential property sales excluding ECs was 18.5 per cent higher than February 2018.

new private residential property salesCommenting on the new private residential property sales data, Mr Desmond Sim, CBRE’s Head of Research for Singapore & Southeast Asia said:

“In February 2019, 455 units were sold while 596 units were launched. This brings the year-to-date number to 891 units sold and 1,094 units launched. In comparison, over the same period last year when sentiments were stronger, 911 units were sold while only 454 units were launched.

Statistically, demand appears to be relatively stable as compared to the same period for 2018. However, a shadow of concern lies with the impending launches over the next 9 to 12 months. Any further pressure from the demand side will exacerbate this supply imbalance.

Given that there were no new launches in February, sales were from existing projects such as Affinity at Serangoon (88 units), the Tre Ver (48 units), and Stirling Residences (31 units). Notably, sales at the other existing projects have plateaued, with only a handful of projects launched in the second half of 2018 achieving more than 50% of total units sold. Clearly, buyers are spoilt for choice.

In the EC segment, just one unit was sold from Northwave and another at Rivercove Residences. All eyes will be on the next highly anticipated EC launch at Sumang Walk, which is likely to be in the next quarter.

Going forward, developers will face stiff competition to attract buyers with a torrent of launches arising from the land acquisition spree in 2017 and first half of 2018. This is also against a backdrop of increasing mortgage rates and slowing economic growth. However, with a comfortable leeway to the 5-year ABSD deadline, developers may still hold firm with prices, but will incentivise agents or rely on stronger project attributes to attract buyers.”

Ms Christine Sun, head of research and consultancy at OrangeTee commenting on the new private residential property sales figures said: “Amid the absence of major project launches and the Lunar New Year festive period, new home sales continued to rise across many previously launched projects last month, a reflection of resilient home buying sentiment.”

New private residential property sales are expected to be revved-up in the coming months said Ms Sun.

She added that home buyers will remain selective and price-sensitive, preferring projects that are well-located, distinctively designed and competitively priced.

“Sales are expected to rev up as more projects are slated to be launched in the coming months, including Amber Park at Amber Gardens, Sloane Residences at Balmoral Road and Rivière at Jiak Kim Street”

Huttons Asia’s research head Lee Sze Teck noted that projects in Serangoon accounted for more than half of February’s new private residential property sales, and contributed to 30 per cent of total units sold.

“MRT infrastructure announcements tend to move condo sales. … Projects in Serangoon – The Garden Residences, Affinity and Riverfront – accounted for one-third of total sales in February.”

An earlier report by Colliers International said that property auction listings in 2018 reached record high numbers amid slower sales. Colliers said that it expects property auction listings and sales to grow in 2019 as residential cooling measures continue to bite.

The report said that there were 1,088 property auction listings (including re-listings) in 2018. This is an increase of 35 per cent over 2017, and mortgage listings (foreclosures) comprise of about 30 per cent of all auction listings.

Mr Paul Ho, chief mortgage officer at iCompareLoan commenting on the new private residential property sales said that in an uncertain economic climate, home buyers should be more careful.

“Bank interest rates are on the uptrend and foreclosures by banks are increasing. Home buyers should be mindful to not put themselves in a place where they struggle to pay their mortgage loans. They should speak to professionals and try and get the best home loans which fits their unique profile,” he said.

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Written by Ravi Chandran

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