New home sales pick up, but market still muted

SINGAPORE — New private-home sales stirred in February after two months of near slumber, but analysts said activity remained muted as developers and prospective buyers continued to hold back in the current cautious environment.

Developers sold 724 non-landed private homes last month, a 28 per cent rise from 565 in January, after they launched 671 units or 22 per cent more than January’s 549 units, figures released by the Urban Redevelopment Authority yesterday showed.

Despite the rebound, analysts noted that the launched volume and sales pale in comparison to the roughly 1,800 units just before the imposition of the Total Debt Servicing Ratio (TDSR) framework last June.

Mr Desmond Sim, Head of Research at property consultancy CBRE, said: “This is an encouraging sign that deals are still being inked and the market is still moving.” But he added that the market had yet to find an equilibrium, saying that this was largely a result of a function of supply: Developers have been treading with caution and trying to read signs from buyers, who have been waiting on the sidelines.

On the lack of new launches, Ms Christine Li, Head of Research and Consultancy at real estate firm OrangeTee, said: “Buyers are becoming increasingly selective. Thus, existing projects are under pressure from newer ones in terms of pricing and location attributes. It seems developers also noticed the trend and decided to increase marketing efforts of existing launches instead of pushing out new projects.”

The Outside Central Region (OCR), or the suburbs, continued to dominate activity with 588 homes sold, as buyers were attracted by lower prices.

The two best-selling projects last month — Rivertrees Residences and Riverbank @ Fernvale in Sengkang — are located in the OCR. At Rivertrees Residences, 218 of the 300 units launched were sold at an average price of S$1,111 psf, while 211 of 250 units launched at Riverbank @ Fernvale were sold at an average of S$1,033 psf.

In the Rest of Central Region (RCR), or the fringes of the city, developers sold 87 units, while in the Core Central Region (CCR), they sold 49 units, 26 of which are at Hallmark Residences in Ewe Boon Road.

“(The sales volume of Hallmark Residences) is excellent, given that it is in the CCR and the quantum is high. This could give developers some comfort that the underlying demand for real estate investment is not totally wiped out by the Government’s cooling measures and the TDSR. The key is to find the right price point with which buyers are comfortable,” said Ms Li. Units at the condominium sold at an average S$1,860 psf.

With the Government indicating that cooling measures and loan curbs would stay, new private-home sales volume for the whole of this year is likely to fall about 30 per cent to about 10,000 to 12,000 units, said PropNex Chief Executive Mohamed Ismail.