FOR IMMEDIATE RELEASE 15 July 2020 – Despite no new major project launches, new private home sales in Singapore rebounded strongly in June 2020, surging by about 105% to 998 units (excluding Executive Condos) from the 487 units transacted in the previous month. Notably, this is the highest new home sales in the month of June since 1,806 units were sold in June 2013. It is also the highest monthly figure since November 2019, where 1,165 new homes were transacted.
New home sales posted the second consecutive monthly increase in June 2020 – albeit from the low base in May – and it continues to indicate a firm underlying demand for affordably priced homes, notwithstanding the challenging economic outlook due to the COVID-19 pandemic.
On a year-on-year basis, last month’s new home sales of 998 units were 22% higher than the 821 units sold in June 2019, which saw four projects being launched then: Sky Everton; Lattice One; Sloane Residences; and Seraya Residences.
Ismail Gafoor, CEO of PropNex, said, “The market took a breather in April and May due to the circuit breaker but sales activity is picking up gradually. As the economy re-opens, we are seeing buyers coming back to take up units – cognizant of the fact that it is a buyer’s market and that units are more attractively priced. Amid concerns about the economic downturn and jobs, there are still genuine buyers out there – with ample liquidity – who are taking advantage of the low interest rates to purchase well-priced units.”
The increase in sales in June was largely driven by mass market homes in the Outside Central Region, supported by the upgrader and owner occupier demand. Projects such as Treasure At Tampines, Parc Clematis, and The Florence Residences continued to move units at a steady clip, owing to their sensitive pricing. These three projects accounted for over 28% of the total sales in June and were among the top 10 best-selling private residential projects last month.
Wong Siew Ying (???), Head of Research and Content at PropNex, said, “Typically, new home sales tend to be supply-led, with new launches propping up transactions and prices. The fact that June’s sales outperformed expectations amid a dearth of new major project launches is perhaps a sign of cautious confidence in the property market, as people adjust to new norms and market realities. This is the best monthly sales since November 2019 and it offers some hope for a more sustained sales momentum over the rest of the year, as developers roll out new developments for sale.”
By price quantum, Realis data showed that 86% of new units sold in June were $2 million and under, compared with 96% in May. PropNex expects the $2 million and below pricing brackets to remain the sweet spot, as buyers continue to be value conscious. Meanwhile, new home sales of units priced above $2 million came in higher in June against May, possibly due to a larger number of bigger units being sold. In terms of size, units under 800 square foot were most popular, accounting for 55% of new sales in June.
Most developers were unable to launch new projects in recent months due to the measures implemented over the circuit breaker and Phase 1 period from 7 April to 18 June 2020. Last month, developers put 597 new units on the market – down from the 615 units launched in May 2020.
Q2 and 1H 2020 New Home Sales
Factoring June’s data, developers have sold an estimated 1,762 new private homes in Q2 2020 – 25% off the pace of sales in Q2 2019. This took new home sales to 3,911 units in the first half of 2020 (1H 2020), representing a 7% decline from the corresponding period last year.
Ms. Wong noted, “Private home sales in Q2, when seen in the context of the pandemic and its massive impact on the economy and society, actually performed better than expected thanks to digital technology. Show flats were shut for most part of the quarter and we saw a large number of transactions being closed via digital tools and virtual tours – reflecting a certain degree of nimbleness in the market to adjust to the new normal. We expect technology to continue to play an important role in driving sales.”
Mr. Ismail added, “In the scheme of things, given the unprecedented nature of this pandemic and the heightened level of uncertainty, we think the primary market held up fairly well and it remains resilient. With potential new launches still to come in the second half of the year, new home sales may find some support and reach 7,500 for the whole of 2020 – down from the 9,912 transactions in 2019.”
Latest Property Real Estate News – Published on 29/06/2020
29 June 2020 – Mainboard listed PropNex, a leading real estate agency in the region has today released its latest research report which provides a detailed look at the private residential transactions in April and May 2020, when the circuit breaker measures to stem the spread of COVID-19 were implemented in Singapore. It also seeks to evaluate the property buying behaviour of consumers during this time and offer some recommendations to developers and investors as Singapore navigates an uncertain economic environment.
Data compiled by PropNex Research showed that the circuit breaker (which was in place from 7 April to 1 June, inclusive) disrupted market activities and snapped the growth momentum in the property market in April and May after a positive Q1, where 4,269 units (excluding Executive Condominiums) were sold. Total private residential sales plunged, coming in at 647 units in April and 660 units in May 2020 – down sharply from the previous year (1,541 unit in April 2019; 1,843 units in May 2019).
For the month of April, 277 units were transacted in the primary market while 370 resale units found buyers. In May 2020, which saw the entire month affected by the circuit breaker, new home sales surged 75% month-on-month (MOM) to 486 units, while the resale segment slumped 53% to 174 units.
Ismail Gafoor, CEO of PropNex, said, “The inability to view properties during this period has hit the resale market as such buyers usually prefer to examine the unit in person before transacting. In contrast, it was observed that buyers of new homes became more comfortable with digital viewings and transacting online from April to May, with attractively priced projects and low interest rates likely nudging them to make a purchase.”
Post-circuit breaker and with the gradual re-opening of the economy, the cautious sentiment and tepid growth would likely weigh on home buying interest and prices generally. However, the MOM rebound in new home sales in May and the return of buyers to pick up units in Phase 2 of the re-opening is a potential sign of underlying demand, particularly for strategically-priced units.
A larger proportion of homes were sold in the price quantum brackets of under $2 million. The trend was the most pronounced in May 2020 where 95% of new homes sold were valued at $2 million and under – the highest proportion of monthly sales in the first five months of the year. In comparison, it was 89% in April, 90% in March, 92% in February, and 73% in January.
This could be due to a combination of factors, including the sale of a higher number of smaller units and selective discounts offered by developers. These categories of homes – mass market and mid-tier – should continue to drive demand with support from upgraders/owner occupiers.
Based on Realis data, the median transacted price for non-landed homes dipped to $1.2 million in May from $1.4 million in January, possibly indicating an increase in demand for more affordable units.
- Unit size
In terms of sizes, homes that are under 800 sq ft have garnered the most interest from buyers and investors. In particular, homes spanning 500 to 800 sq ft were most popular in April and May, accounting for 62% and 54% of the total, respectively. This could point to some investors entering the market to pick up smaller units. It also indicated that buyers at large remain very price sensitive, buying less sizeable units to keep overall quantum affordable.
As COVID-19 concerns ebb over time, buyers should start to return to the market – particularly those who are more confident about job security or have built up substantial savings for investment. Meanwhile, a subdued economy would help to keep home prices in check and the low interest rate environment continues to be supportive of home financing.
PropNex projects a total of 14,500 to 15,500 private homes – including 8,000 to 8,500 units of new homes and ECs – could be sold this year, barring a resurgence of COVID-19 cases and widespread job losses. Given developers’ holding power and households generally not over-leveraged for property purchase, PropNex does not expect a sharp drop in prices. Overall private home prices are projected to fall by up to 3% for the full-year 2020 as the pandemic drags on.
Wong Siew Ying, Head of Research and Content at PropNex, said, “The pandemic has temporarily derailed the healthy growth in the property market. Going forward, demand and prices should track closely with Singapore’s economy. The long-term outlook for the Singapore residential property market remains positive, as factors that support the housing market – including pro-business policies, safety, and the stable political environment – remain intact. A look back in history paints a resilient picture of the residential market, which has recovered after each crisis with prices generally keeping pace with economic growth.”
In addition, the government has announced nearly $100 billion in stimulus packages to help businesses and protect jobs, which will lend some support to the property market.
Beyond COVID-19: The next normal
When show flats were shut, developers, agents and their agencies, as well as customers have turned to digital platforms in varying degree to market and transact properties. These online engagements via e-learning platforms and marketing tools have translated to steadily rising sales in the past 11 weeks following the imposition of the circuit breaker. Such physical to digital shifts would only grow in importance in the real estate sector.
With remote working gaining prominence, it is perhaps timely to rethink the concept of home and whether they are future-ready. Meanwhile, homebuyers could seize pockets of opportunities as prices fall in line with new market realities amid more subdued outlook.
FOR IMMEDIATE RELEASE 15 June 2020 – New private home sales unexpectedly rise in May 2020 despite a lack of new launches and the closure of all property sales galleries as part of measures to contain the spread of COVID-19 in Singapore.
Developers sold a total of 486 units of private new homes (excluding Executive Condos) in May – up sharply by 75 per cent from the 277 units transacted in April. On a year-on-year basis, sales were 49 per cent lower than the 952 new homes shifted in May 2019. Notably, the 486 units sold in May 2020 is the lowest monthly tally for the month of May since 453 new homes were transacted in May 2008.
Taken together, developers have sold 2,912 new homes in the first five months of 2020, representing a 17 per cent decline from 3,527 units sold in the corresponding period of 2019.
Chief Executive Officer of PropNex Realty, Ismail Gafoor, said, “The sales in May were very encouraging given the dearth of launches and shuttered show flats. With the rising phenomena of virtual sales galleries, we are seeing buyers and investors adjusting and adapting to the new normal and digital modes of property marketing and sales. We are monitoring the market closely but it appears that the worst may be over as Singapore continues to work at containing the virus and is exploring a phased approach to re-opening the economy.”
Wong Siew Ying, Head of Research and Content, said, “The rebound in sales witnessed in May was predominantly driven by the better take-up in the city fringe and mass market segments, as a handful of competitively-priced projects continued to shift units at a steady clip. May’s sales performance offers optimism for June, where developers can tap a larger-than-usual buyer pool for their existing launches, with the resumption of the school term this month and travel restrictions keeping families in the country.”
The top 5 best-selling projects for the month of May were Treasure At Tampines, Parc Clematis, The Florence Residences, Parc Esta and Jadescape. Treasure At Tampines was the top-selling development, with a total of 56 units sold at a median price of $1,360 psf. It was followed by Parc Clematis, which moved a total of 55 units at a median price of $1,599 psf.
Interestingly, of the five best-selling private residential projects, three developments – Treasure At Tampines, The Florence Residences, and Jadescape – recorded a slight increase in their median price compared to when they were launched. Meanwhile, median prices at Parc Esta and Parc Clematis saw a marginal dip in May from when the two projects were launched in November 2018 and August 2019, respectively.
The pricing ‘sweet-spot’ that saw most transactions done in May remained at under $1.5 million. A unit (3,305 sq ft) at KOPAR at Newton was the most expensive unit transacted in May, with a price tag of $7.8 million ($2,385 psf).
Mr.Ismail added that, “We forecast that developers could still sell about 7,000 to 7,500 new units (excluding Executive Condos) in 2020, barring a second wave of infection and widespread job losses. We believe developers’ sensitive pricing strategy, the low interest rate environment, and the long term prospects of the property market in Singapore will continue to underpin demand for choice homes.”
New launches in the upcoming months include Forett @ Bukit Timah by Qing Jian Realty and Penrose by City Developments Limited and Hong Leong Holdings’ Intrepid Investments.
(LATEST FROM URA) 🎉 A total of 975 units of Private New Homes (Excluding ECs) were sold for the month of February 2020!
CEO Mr Ismail Gafoor highlighted, “Although the impact of the Covid-19 virus is reverberated throughout the Singapore’s economy, the private new home sales segment continues to be in strong demand. This is mainly due to attractive pricing adopted by developers. For the month of February, there was a 57.3% increase in sales as compared to January. While, on a year-on-year comparison, it was a 114.3% surge.”
The top 5 best-selling new launches for the month of February were The M, Parc Canberra, Treasure At Tampines, Parc Esta and Jadescape. The M was the best-selling development, with a total of 380 units sold at a median price of $2,439 psf. While, the second best-selling project was Parc Canberra, which sold a total of 324 units at a median price of $1,111 psf.
WING Tai Asia sold 70 per cent or over 360 units of its latest condominium project The M over the weekend, even amid the continued Covid-19 outbreak.
Units were sold at a mean price of S$2,450 per sq ft . The M is that the first major private residential development opened for public preview since the virus outbreak started in earnest in Singapore.
Stacey Ow Yeong, head of selling , Wing Tai Property Management, said the bulk of buyers are Singaporeans in their 30s and 40s, comprising both owner-occupiers and investors.
“Many of them were drawn to The M’s prime location within the Ophir-Rochor Corridor, which is rapidly transforming into a vibrant, mixed-use and eventually car-lite district, our unique work-life design concept and our reasonable pricing,” she said.
More than 2,000 people visited The M’s sales gallery at the junction of Middle Road and Selegie Road when it opened its doors to the general public on Feb 15-16. Various health and safety precautions were taken to make sure the well-being of clients, including professional cleaning of the sales gallery on an hourly basis, temperature screening, collection of contact details, and limiting the amount of individuals inside at anybody point in time, consistent with a press release by Wing Tai Asia.
As the expressions of interest within the first weekend were strong, balloting was administered between 8.30am and 3pm on Feb 22. The M comprises studio and one- to three-bedroom units from 409 square feet to 904 square feet spread across three 20-storey towers and one six-storey tower.
The studio and one-bedroom units feature a design concept called Home/Work, which allows for living areas to be converted into workspaces. Design elements include a multi-function table for dining and entertainment which will be converted into a piece desk, and a sliding wardrobe that doubles up as workspace storage solution.
The M is situated almost offices, shopping malls and medical facilities within the central downtown while the Bugis, hall and Esplanade MRT stations are a brief walk off .
The condominium is predicted to be completed by the primary quarter of 2024.
“Price-to-income ratio has come down from 5.1 in 2016 to 4.6 this year” This explains why, despite the higher PSF, new launches are still popular with buyers. The volume shows there is higher demand for new launches vs resale condos.
Many clients are puzzled why new launches are able to achieve capital appreciation despite the higher PSF and why older resale condos are facing stagnation in prices despite their lower PSF.
What are the underlying reasons for property buyer behaviors? PM us and we will share these important findings which you can put to good use when you wish to structure your property portfolio.