Singapore adjusts to online means of buying and selling new homes with 75% jump in sales from April
Developers sales data shows selling new homes and buying resumed after Covid-19 lockdown period
The month of May saw more buyers resuming with their new home purchases with a 75 per cent increase from developers’ April’s sales figures.
“Through this we’ve seen that Singaporeans are generally very adaptable to new experiences. April was the initial period of caution and uncertainty as agents and developers explored new virtual avenues of showcasing their projects and carrying out transactions,” says Mr Karamjit Singh, chief executive of Showsuite Consultancy.
“Having been on an extended circuit-breaker period, activity is gradually resuming as home buyers begin to get on with their purchases. Some developers dished out sweeteners to help overcome the constraints of not being able to physically showcase their projects, which helped move units,” says Mr Singh.
“Developers and agents have been stepping up the use of webinars and virtual tours via video calls in order to walk buyers through various options. Showsuite.com, which is Singapore’s only dedicated new homes portal, experienced a 400% jump in virtual-tour traffic during the circuit-breaker. Showsuite has trained over 1,000 property agents via video calls on the array of interactive forms of project visualizations that is currently available on the portal and the optimal ways of harnessing these for their virtual presentations”.
Data showed selling new homes and buying were promising in May
Out of 57 projects which clocked in sales in May, 14 saw double digit sales. Out of them only two of them had median sale prices of above $2,000 psf, underlining the resilience of the affordable new homes market.
Selling new homes and buying showed upward trend in June
Data released by the Urban Redevelopment Authority on 15 July showed that 998 new private homes, excluding Executive Condominiums (EC), were sold in June, up by 104.9% from the 487 units that were shifted in May 2020. On a year-on-year (YOY) basis, developers’ sales increased 21.6% from the 821 units (excl. ECs) transacted in June 2019.
This brings private home sales (excl. ECs) in Q2 to 1,762 units, down 25.0% compared to the 2,350 sold in Q2 last year. However, year-to-June or first half 2020 new home sales (excl. ECs) came up to 3,911 units, just 6.6% lower than the 4,188 units in first half 2019.
In June, developers sold 33 ECs – which are a hybrid of public and private housing – also higher than the 23 ECs sold in May. This brings total developer sales (including ECs) in June to 1,031 units, up 102.2% MOM and 25.4% YOY.
Tricia Song, Head of Research for Singapore at Colliers International, said, “June developer sales more than doubled month-on-month (MOM), hitting the highest monthly sales since November 2019 and the highest June sales since June 2013. We believe this reflects pent-up demand from the two-month circuit breaker period.”
She added, “The circuit breaker was lifted on 19 June and showflat viewings had resumed. While there was no major new project launch, buyers snapped up more private homes from earlier launches, also partly attracted by discounts dangled and lower borrowing costs.”
There was only one new project launch – 18-unit Parkwood Residences at Yio Chu Kang, which sold one unit at S$1.74 million or S$1,323 psf. The bulk of the sales in June still came from earlier-launched projects.
The top three selling projects in May remained the most popular in June. The best-selling private residential projects in June were:
- Treasure at Tampines, which moved 104 units at a median price of S$1,348 psf;
- Parc Clematis which sold 90 units at a median price of S$1,637 psf; and
- The Florence Residences which moved 89 units at a median price of S$1,522 psf.
June developer sales in these three mega projects, with 1,410 to 2,203 units each, have crossed the 50% sales mark.
Mr Desmond Sim,CBRE’s Head of Research, Southeast Asia, commenting on June developer sales said:
“With the easing of restrictions and the reopening of sales galleries from 19 June 2020, new home sales picked up in June 2020. A total of 998 new homes (excluding ECs) were sold for the month, following only 277 and 486 units in April and May 2020, respectively. This is an encouraging number, given that new home sales volume in June exceeded pre-circuit-breaker period levels, which was averaging at 716 units per month in Q1 2020.
There was an absence of major project launches as most developers chose to defer their launch dates. Parkwood Residences, a small project with only 18 units, was the only development that launched in June 2020.
Deals continued to flow from balance units from prior projects, such as Treasure at Tampines (104 units), Parc Clematis (90 units), Parc Esta (82 units) and The Florence Residences (89 units). There were also buyers looking for opportunities in the high-end market with 16 units sold at KOPAR at Newton. Sales have also been motivated by some developers offering discounts and incentives. The low interest environment is also one of the biggest sales motivator.
To date, new home sales figures from the first half of 2020 totalled at 3,911 units, representing a decline of 6.6% y-o-y. CBRE Research believes that sales momentum may be impacted amid slower economic growth. According to MTI advance estimates, Singapore’s GDP fell by 12.6% y-o-y in Q2 2020 and recovery is likely to be slow. That said, with a slew of projects expecting to launch in Q3 2020, buyers’ interest may be piqued especially if developers become more competitive in their pricing. While property sales volume may not match up to previous years, there will still be an underlying demand to help soak up balance units.
Taking into account these factors, new home sales volume is forecasted to fall between 5,000 and 6,000 units (excluding ECs) for the whole of 2020.”