Jump in sales of new private homes in May, with more units launched

SINGAPORE — The number of new housing units launched by private developers and the volume of transactions hit multi-month highs in May, based on data released by the Urban Redevelopment Authority on Monday (June 18).

Around a thousand (1,060) new private homes were launched last month — nearly three times the 370 units launched a year ago and the highest since April last year.

Last month, too, developers sold more than a thousand (1,121) private homes, excluding executive condominiums, compared with 732 units the month before in April. The latest figure is the best monthly take-up since August last year when 1,246 new private homes were sold.

The number of new launches are expected to continue picking up at least until the first half of next year, as developers rush to cash in on pent-up demand in the property market and hedge against rising interest rates.

Ms Christine Sun, head of research and consultancy at real estate firm OrangeTee, said: “Many developers have fast-tracked their project launches to ride on the current sales momentum. The positive buying sentiment has been fuelled by the collective sales frenzy where many buyers are rushing to buy a property now in anticipation of higher property prices.”

The strong rebound in transactions last month were driven primarily by Twin Vew and Amber 45, which were also the largest projects launched. Twin Vew, for instance, saw buyers snap up 442 of its 520 apartments in its launch weekend, fetching an average price of S$1,399 psf. Thus far, only 66 units remain unsold in the project at West Coast Vale.

Amber 45 along Amber Road in the eastern part of Singapore has sold 86 out of 100 units at a median price of S$2,378 psf.

Based on the number and sizes of en-bloc land parcels acquired in the last two years, the market could see 19,500 new units launched by June next year, Ms Sun said.

Real estate services company Colliers International expects 12,600 new private homes to be sold in the whole of this year, a 20 per cent hike from 10,566 units last year.

Mr Nicholas Mak, executive director of real estate investment firm ZACD Group, said that developers are expected to release their projects “at a measured pace” in the coming months to “take advantage of the positive market sentiments”.

There were already some large property launches in June, Mr Mak noted. These included the 1,052-unit Affinity at Serangoon condominium and The Garden Residences, also at Serangoon, which has 613 units. Set to be launched in the next two months are 1,259 units at Stirling Residences in the Queenstown estate, and 805 units at Park Colonial in the forthcoming Bidadari new town.

“Some developers may rush to launch their projects before the start of the seventh lunar month,” Mr Mak added, referring to the period of the Chinese Hungry Ghost Festival where some buyers refrain from buying houses because they deem it inauspicious.

Mr Ku Swee Yong, chief executive of International Property Advisor, said that the anticipated increase in new launches could also be a response to rising interest rates.

“Developers may be looking to sell as soon as possible so that they can have some buffer against high interest rates.”

Most analysts predict that there is enough pent-up demand among buyers to absorb the influx of new launches, guarding against a supply glut, at least in the short-term.

Mr Chris Koh, director of property firm Chris Koh International, said now that market sentiments have taken a turn for the better, buyers are “hungry after waiting on the sidelines for the last four years”.

“Some may also fear that prices will increase if they don’t buy now.”

Not only are displaced property owners looking for replacement homes after their previous residences were put up for collective sales, some who may have made a windfall from those sales might be looking to invest in more properties, Mr Koh said.

However, looking further ahead, he also said that the large number of new launches could pave the way for a supply bulge in two years’ time.

Most of the property analysts approached by TODAY forecast that private home prices will continue to go up, in line with rising demand. In the coming months, Ms Sun from OrangeTee expect prices to rise because “the existing stock in the market is depleting and new supply will only come in from the second half of this year”.

“Prices in the future are also expected to trend further due to the higher land and acquisition cost,” she added.

Mr Eugene Lim, key executive officer of property firm ERA, cautioned developers against “over-pricing”, because buyers are still price-conscious, especially as the variety of options widen. “Those who over-price will lost out to their competitors as the buyers will soon have a lot of choices.”

Mr Ku, on the other hand, is of the view that prices will not climb much in a market where buyers are “spoilt for choice”. “Developers (who raise their prices) will need to entice buyers with better product features,” he said.