Early sales of private homes for May indicate it could top April’s full-month sales

EARLY sales of private homes for May show it is likely to surpass April’s, a month where developers sold 735 private homes in the absence of major launches.

April’s tally was down around 30 per cent from the 1,054 units moved in March, and marginally higher than the 733 units developers sold in the corresponding month a year ago.

“Early sales numbers for May indicates that it is likely to break April’s level,” said Huttons Asia’s head of research, Lee Sze Teck. “Based on caveats lodged with the Urban Redevelopment Authority (URA), we see more than 200 new sales in the first week of May alone. If the average monthly sales for the rest of 2019 can be maintained at April’s level, 2019’s sales will be similar to 2018.” Some 8,795 private homes were sold in 2018.

Projects which have already started selling in May or are likely to launch this month include Amber Park in East Coast, Olloi Condo at Changi Road, The Woodleigh Residences in Bidadari Estate, The Gazania and The Lilium at How Sun and Parc Komo in Changi.

Four hundred and forty-four private homes were launched in April, which is the lowest figure so far this year and roughly just a quarter of the units released in March. Of the 444 units, 30 were in the core central region (CCR), 294 were in the rest of the central region (RCR) and 120 were outside the central region (OCR).

In comparison, 1,812 units were launched for sale in March, and 664 units were launched in April a year ago.

Including ECs, developers found buyers for 744 units last month, down about 30 per cent from 1,062 units in March and 44 per cent lower from 1,329 units in April last year.

After a slew of 10 launches in March – including mega projects Treasure at Tampines and The Florence Residences – there were three in April, analysts highlighted. The three mid to small-sized projects launched last month were the 171-unit Mayfair Modern, 144-unit Coastline Residences and 85-unit Wilshire Residences. However, most of the sales in April came from previously launched projects, such as The Tre Ver and Parc Botannia.

Developers turned cautious in April as the mismatch between private homes launched and sold in March clearly signalled that there was insufficient demand to absorb so much supply, pointed out Ong Teck Hui, senior director of research & consultancy at JLL. “Most of the projects launched in March suffered weak take-up rates. Taking the cue from this, developers turned cautious and scaled back their launches in April to avoid poor sales progress in their projects.”

Still, April’s sales performance has been encouraging at many existing launches, given that the cooling measures are still in place and a number of projects have been launched in recent months, said Christine Sun, head of research at OrangeTee & Tie.

CBRE’s head of research, Desmond Sim, also noted that mass market launches are underpinning sales; with median prices reduced at certain projects, this could have contributed towards a pickup in sales, he added.

“Most buyers continued to be price sensitive and value-conscious, with the lowest priced project in OCR – Parc Botannia – and the lowest-priced in RCR – The Tre Ver – topping the charts (in April),” said Tricia Song, head of research for Singapore at Colliers International.

“On the other hand, super luxurious Boulevard 88 also continued to do well, selling 20 units at a median price of S$3,655 psf, after selling 26 units in March.”

Another high-end project that did well was 3 Cuscaden, which sold 18 units at a median price of S$3,468 psf.

“This suggests that demand for high-end projects remains healthy but only if the projects have the right location and attributes,” highlighted Cushman & Wakefield senior manager (research) Wong Xian Yang.

Looking ahead, Colliers estimates that overall private home prices could stabilise in the second half of this year, and edge up by one per cent for 2019 as a whole, underpinned by the halt in interest rate hikes and by en bloc beneficiaries buying replacement homes.

“Developers are likely to keep prices reasonable, as they face robust competition from various project launches all across the island,” reckons Eugene Lim, ERA Realty’s key executive officer.

“We are likely to see a few more launches in May before most developers take a break for the June holidays. Launch activity is then expected to intensify again in July.”

However, PropNex Realty chief Ismail Gafoor believes that developers might dangle incentives and discounts to entice these buyers and investors, given that more new launches are expected in the months ahead.

Meanwhile, Dr Lee Nai Jia, head of research for Knight Frank Singapore, expects prices to stay stable and sales to maintain at its current pace going forward.

He added: “However, there may be a spike either in early July or after the Hungry Ghost month period, when more units are launched.”

Source: The Business Times

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