Developers’ private home sales for August are likely to match the level of July thanks to the launch of Forett At Bukit Timah earlier this month, as well as ongoing sales in existing projects on the market.
“We see primary-market sales being driven by a continuation of the pent-up demand that was built up during the ‘circuit breaker’ partial lockdown,” says PropNex CEO Ismail Gafoor.
The 1,080 private homes that developers moved last month was up 8.2 per cent from the 998 units they sold in the previous month, according to data released by the Urban Redevelopment Authority (URA) on Monday.
However, the latest figure is 8.4 per cent lower than the 1,179 units developers sold in July 2019. The above figures exclude executive condominium (EC) units, which are a public-private housing hybrid.
The 1,080 private homes sold in the primary market last month reflects the third consecutive month-on-month increase. It is also the highest monthly sales figure this year and the best showing since the 1,165 units that developers moved last November.
Edmund Tie & Co chief executive Ong Choon Fah commented: “There is asset inflation because of the low interest rate environment.
“The volatility in equity markets puts some people off because of the high risk component. Not everybody knows enough or has courage to go into commodities and precious metals. Whereas real estate is something physical and you can use it or pass it on to the next generation,” she said.
Knight Frank Singapore research head Leonard Tay noted that despite the current weak economy, those whose jobs or businesses are not at risk and with substantial savings may have found attractive buys in the current market.
Savills Singapore executive director Alan Cheong acknowledged that developers’ sales for June and July has been encouraging. “However, this pandemic-induced recession is unique and replete with uncertainties on almost all socio-economic fronts because there are no precedents and textbooks to fall back on for guidance.
“But we can almost expect income levels to reset to a lower base and structural changes to the job market are likely to leave un- and under-employment high.”
That said, Mr Cheong suggests that asset prices are likely to remain elevated, supported by low interest cost and an increase in money supply.
“We are likely to see higher inflation relative to income growth.”
Mr Tay of Knight Frank noted that last month, steady sales were observed in the large suburban projects of Treasure At Tampines (112 units), Parc Clematis (87 units) and The Florence Residences (78 units) – the same three top-selling projects in June.
Summing up the month’s sales activity, ERA Realty’s head of research and consultancy, Nicholas Mak commented: “The buying momentum in the residential primary market that started after the easing of the partial lockdown or “circuit breaker” on June 19 continued into July.” That was the day when showflats resumed operations.
“Property developers also took advantage of the buying momentum to release more private housing units for sale. Although no new residential project was launched in July, 869 units from existing launched projects were released for sale,” said Mr Mak.
The number of private homes released for sale last month was 45.6 per cent higher than the 597 units in June but down 4.6 per cent year on year.
Upcoming launches include Penrose in Sims Drive; The Landmark in Chin Swee Road; Myra in Potong Pasir; Verdale in Jalan Jurong Kechil; and Ki Residences in Brookvale Drive, according to PropNex.
Huttons Asia research director Lee Sze Teck’s list of upcoming launches include Noma in the Guillemard area and Hyll on Hollland .
Said Mr Ismail of PropNex: “With more new launches planned for the rest of the year, we anticipate a reasonably active primary market in the months to come – particularly after the traditional Hungry Ghost month from Aug 19 to Sept 16.”
JLL’s senior director of research and consultancy Ong Teck Hui said: “The main determinants of new launches and sales take-up for the rest of the year are the severity of the recession, especially relating to unemployment and whether the Covid-19 infection can remain under control without the need for circuit breaker measures to be re-imposed.”
OrangeTee & Tie head of research and consultancy Christine Sun forecasts that developers will sell 7,500-8,500 private homes (excluding ECs) this year, against last year’s tally of 9,912 units.
URA’s data released on Monday showed that including ECs, developers found buyers for 1,142 units last month, an increase of 10.8 per cent from the 1,031 units they sold in June this year, but a drop of 26.7 per cent from the 1,557 units sold in July last year.
Mrs Ong of Edmund Tie & Co said that those who are buying private homes now are thinking long term – whether they are purchasing a property for their own occupation or for their children or grandchildren.
That said, she highlights the need for buyers to be mindful of their risk capacity – including their job security – and then buy responsibly.
“If you can afford the property, then look out for attributes in the property that will bring you forward when the market improves, including location and flexibility of use.
“Even when the market is down, everybody still needs a roof over their head – whether it is a rental property or their own home. You’ll never do away with a residential property.”
The Business Times