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Singapore bucks trend with higher home sales inked during the seventh lunar month
The property market bucked the trend with higher new home sales inked in August, although market activity typically tends to slow during the seventh lunar month when the Hungry Ghost Festival is observed. New home sales rose ‘higher and quicker’ than expected after the Circuit Breaker period, which upended sales in April and May with the showflat closures.
Last month, sales of new properties surged to an 11-month high with a fourth consecutive monthly increase amid the pandemic and global economic slowdown. According to the developers’ sales survey by the Urban Redevelopment Authority (URA), new home sales excluding Executive Condominiums (EC) rose 16.3 per cent month-on-month to 1,256 units in August from 1,080 units in July. This is the highest sales volume achieved since 1,270 units were sold in September 2019. Including ECs, sales increased by 14.4 per cent month-on-month to 1,307 units. On a year-on-year basis, the number of private home sales (excluding EC) rose 11.8 per cent from 1,123 units.
Private homes in the Rest of Central Region (RCR) and Outside of Central Region (OCR) continue to form the bulk of purchases last month.
The best-selling projects include Forett at Bukit Timah, Treasure at Tampines, Parc Clematis, The Garden Residences, The Woodleigh Residences, Jadescape, Whistler Grand, Daintree Residence, The Florence Residences, Affinity at Serangoon, Noma and Stirling Residences.
Last month was the highest August-sales achieved over the last eight years. Sales had also ‘outperformed’ previous crises and periods when cooling measures were implemented. For instance, 325 new homes were sold in August 2008 amid the Global Financial Crisis. After fresh rounds of cooling measures were implemented, 756 units were sold in August 2013 and 617 units in August 2018.
The rising economic uncertainties and volatile equity markets seemed to be fuelling the boom for properties as more buyers seek shelter for safe-haven assets. Investors have the tendency to move away from cash holdings and riskier investments towards property assets for wealth preservation. Moreover, record-low interest rates are stoking the property market’s recovery as mortgages are now increasingly affordable for both owner-occupiers and property investors.
The property market is currently buoyed by strong domestic demand. Foreign buyers seen returning to the market has also kicked the upturn into higher gear last month. According to URA Realis data, Singaporeans accounted for the bulk of purchases with 1,047 transactions, thus constituting 84.4 per cent of all new non-landed home sales (1,240 units) last month. This is also the highest number of Singaporean purchases since 1,237 units were transacted in July 2018. The number of new non-landed homes bought by Singapore Permanent Residents (PR) similarly rose to a two-year high with 139 transactions while non-PR purchases hit a 7-month high with 54 units last month.
The strong domestic consumption over the past few months reflects a sustained appetite for investment assets among locals. Properties perhaps remain to be a ‘safer bet’ among many Singaporeans, especially investors looking for stable, diversified sources of returns during times of uncertainty.
Demand for property is anticipated to rise further in tandem with the tidal wave of quantitative easing (QE) unleashed around the world to stimulate economies. Interest rates at new cyclical low levels will also prop up the market in the coming months.