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Private new home sales spiked in July despite the recent announcement of the cooling measures. According to developers’ sales survey by the Urban Redevelopment Authority for July, private new home sales excluding executive condominiums (ECs) jumped 163.6% month-on-month (m-o-m) and 55.0% year-on-year (y-o-y). Including ECs, new home sales rose 151.6% m-o-m but dipped 15.1% y-o-y. 52% of private home new sales are from the RCR; mainly attributed to Park Colonial (429 units sold) and Stirling Residences (339 units sold). This is followed by OCR (44%), due to the strong sales volume at Riverfront Residences (628 units sold), and CCR (4%).
The strong sales in July may not offer a good gauge of the current buying sentiment after the cooling measures, as the figures are ‘inflated’ by over a thousand units that were being sold on the night of the announcement of the cooling measures. Many buyers especially investors were snapping up units ahead of the implementation of the increased ABSD. Major projects like Park Colonial and Riverfront Residences had brought forward their official launches while other developments gave discounts to entice buyers during the last-minute buying spree.
We examined the URA caveats (downloaded on 14 August 2018) to estimate the impact of the cooling measures on the residential sales market. 1,715 caveats (non-landed and landed new sales excluding ECs) were lodged in the month of July, of which 38.4% were recorded post-measures (06 – 31 July). The high percentage of caveats lodged after the implementation of the cooling measures indicate that sales are still relatively quite healthy, driven mainly by first-timers who are less affected by the cooling measures and may have found the current launch prices quite attractive. We observed a shift in buyers’ preference for bigger units after the cooling measures as there are now more owner-occupiers than investors. The caveat analysis shows a decrease in the percentage of new sales below 800
sqft from 68.4% pre-measures (01 – 05 July) to 62.3% post-measures, while sales of new homes between 800 and 1500 sqft increased from 29.4% pre-measures to 34.7% post-measures.
Moving forward, sales are expected to fall significantly from the high-base of July sales. This is mainly due to multiple factors like the knee-jerk reaction to the latest cooling measures, slower sales in the lunar seventh month and fewer new launches. Many developers are going ahead with their launches from October, including JadeScape, The Jovell, Parc Esta, Kent Ridge Hill Residences, Treasures at Tampines and The Woodleigh Residences.
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