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Sales rebound strongly as buyers return in droves
New home sales posted a strong rebound last month, with developers selling 1,589 private homes in July, up 82.2 per cent from 872 units in June despite a tightening of community measures imposed in the second half of July. This is the highest sales since January 2021 when 1,633 units were sold.
Including Executive Condominiums (EC), new home sales increased by 81.3 per cent month-on-month (m-o-m) to 1,744 units in July from 962 units moved in the month prior. Compared to a year ago, new sales excluding ECs rose by 46.7 per cent, according to the Urban Redevelopment Authority (URA) sales survey.
Effective from 22 July to 10 August 2021, Singapore went back to Phase 2 (Heightened Alert) where safe management measures were further tightened to break the chains of transmission among a growing number of Covid clusters. House viewings and visitor capacity at sales galleries were scaled-down.
The tightened measures did not seem to dampen market sentiment significantly. The impact of the safe management measures was more modest when compared to the previous rounds of curbs. Developers and sales agents learnt to ‘get over the bump’ by using sales technologies to close deals and deployed social media tools to stay in touch with customers.
Sales picked up across many projects last month as buyers returned to the private residential market in droves. Some rushed to buy units for fear of being priced out of the market. Overall prices seem to have bottomed out and some projects have raised prices for their balance units. Further, Singapore’s economy is poised for a solid recovery as we reopen our sectors further in the coming months.
On the sellers’ end, developers were equally keen to launch units and close more deals ahead of the 7th lunar month which has started from 08 August 2021. The number of units launched for sales (excluding EC) rose 27 per cent m-o-m to 1,104 units last month.
Sales of pricier mass-market condominiums rose sharply last month. According to URA Realis caveat data, the non-landed private homes (excluding EC and bulk purchase of more than 1 unit) sold for at least S$1.5 million in the Outside of Central Region (OCR) rose to a new high with 397 transactions in July, smashing the previous record in December 2020 (293 units). Of this number, 141 were sold for at least S$2 million.
The stellar sales indicate that more buyers were willing to pay a premium for mass-market condominiums that are well-located or possess good product attributes.
In terms of per square foot prices, 829 non-landed homes in OCR were sold for more than S$1,500 psf while nine units were transacted above S$2,000 psf in July.
Pricier city fringe homes were also transacted last month. 195 non-landed homes in the Rest of Central Region (RCR) were sold above S$2,000 psf. Of this number, 45 units were sold for at least S$2,500 psf across different projects like Amber Park, One Pearl Bank, Riviere, One Meyer, Meyer Mansion, Nyon and Sky Everton.
Last month, new sales were propped up by Pasir Ris 8, Normanton Park, Midwood, Sengkang Grand Residences, Ki Residences at Brookvale, Parc Clematis, and Treasure at Tampines. Due to the strong demand for private homes in the suburban region, the OCR formed the bulk of new home purchases (exclude EC) last month with 63.7 per cent. RCR constituted 27.6 per cent of total sales while the Core Central Region (CCR) made up 8.7 per cent.
The current home supply especially in the suburban regions is not able to meet the swelling demand from Singaporeans like HDB upgraders. Further, developers in Singapore are landbank-starved as enbloc sales have ground to an almost complete halt after the cooling measures.
Developers’ hunger for land will grow as they continue to pare down their unsold stock. We may see more active bidding activities at land auctions and government land sales programmes. Market optimism and the declining home supply may drive home prices higher in the second half of this year.
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