Private home sales in August surge 165%

SINGAPORE — New private home sales in August this year surged 165 per cent from a year ago, according to data released by the Urban Redevelopment Authority (URA) on Friday (Sept 15).

Developers sold more units in the first eight months of the year compared with the whole of last year, in a sign that the local property market is recovering, said analysts. Prices however remain relatively stable, indicating that a full-blown recovery is still some way off.

Some 1,241 units excluding executive condominiums (EC) were sold by developers last month against 468 in the same month last year. On a month-on-month basis, private home sales in August were 11.7 per cent higher compared with the 1,111 units sold in July.

In the first eight months of this year, developers sold 8,391 private homes, up 60.3 per cent versus the same period last year.

It is more than the 7,972 units that developers sold in the whole of last year, according to URA data.

“Overriding demand by buyers in trying to purchase close to the market trough will continue to keep transactions buoyant,” said Mr Ong Teck Hui, national director of Research and Consultancy at JLL.

He noted however that the increased market activity indicates a “recovery in progress” which is not to say that the market has fully recovered from the slump since cooling measures were introduced in 2013.

The private residential projects launched in August were the Le Quest mixed development at Bukit Batok and 24 One Residences at Pasir Panjang.

The 516-unit Le Quest launched 300 units and sold 286 at a median price of S$1,309 psf, while 24 One Residences sold 17 of its 24 units at a median price of $1,761 psf.

The other top selling projects during the month were Symphony Suites, which transacted 59 units at a median price of $1,071 psf, Commonwealth Towers, which sold 56 units at a median price of $1,662 psf, and Sophia Hills which off-loaded 54 units at a median price of $1,992 psf.

“As the market is predominantly driven by quantum, the steady sales of previously launched projects over the past few years have diminished the stock, offering prices at a palatable level. This steady decline (of stock) will affect the overall sales number should the number of launches remain at the current levels,” Mr Desmond Sim, head of CBRE Research, Singapore and South-east Asia said.

He highlighted that the trough may not last much longer as land prices are increasingly being bought at higher prices.

“September’s sales may be impacted by the hungry ghost month and the possibility that there may be limited launches this month,” Mr Sim said, noting that the property market is yet to see a recovery in full swing as prices continue to be stable.

According to Mr Eugene Lim, key executive officer, ERA Realty, positive sentiment in the market has pushed the buying momentum which is expected to continue into the second half of the year.

“Many buyers are committing to a purchase before next year, as that is when developers who bought land at higher prices this year will launch their projects. Buyers are also taking a longer term perspective, in the belief that the property market is bottoming out this year or next, and they want to ride on the wave of price recovery when it comes,” added Mr Lim.

Overall there were 1,581 private homes and ECs sold last month, down from the 2,089 units sold in July this year. After the successful launch of Hundred Palms Residences and the robust sales of 978 new EC units in July, new EC sales in August fell 65.2 per cent to 340 units.

Top-selling EC projects in August were Sol Acres with 66 units sold at a median price of S$812 psf, INZ Residences with 55 units sold at a median price of $814 psf, and Parc Life with 47 units at a median price of $799 psf.

Some 3,344 new EC units have been sold in the first eight months of this year, 10.1 per cent higher than the same period last year, which analysts said is a reflection of sustained demand from buyers.

According to chief executive officer of PropNex Realty, Mr Ismail Gafoor, total new home sales may cross the 16,000 mark by end of the year, with 12,000 private properties and 4,000 ECs expected to be snapped up by buyers.

“Buyers are more prepared to pick up existing projects that are rightly priced, fearing that prices might increase by more than 10 per cent come next year, with the recent aggressive land bids from recent land sales.”

Properties in the outside central region continued to be most in demand, accounting for 61.8 per cent (767 units) of new private home sales (excluding ECs) last month, while the rest of central region and core central region accounted for 26.9 per cent (334 units) and 11 per cent (140 units) respectively.