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Developers’ sale up by over 57% in February shows URA’s statistics

by • March 18, 2020 • Research and AnalysisComments (0)88

Developers’ sale up 57.3 per cent month-on-month, double the transactions in January

Data released by the Urban Redevelopment Authority on Monday (16 March) showed that 975 new private homes (excluding Executive Condos) were sold in February, up by 57.3% from the 620 units that were shifted in January 2020. On a year-on-year basis, developers’ sales more than doubled from the 455 units (excl. ECs) transacted in February 2019.

developers' saleColliers International said new launches dominated developers’ sale in February 2020. Transactions surged, thanks to the new project – The M in Middle Road – which accounted for over a third of the sales last month.

Colliers noted that in recent weeks, the COVID-19 outbreak has further heaped uncertainty on the global economy and that while it remains cautiously optimistic about home sales, much would depend on the economic fallout from the outbreak and whether there are large-scale job losses – widespread retrenchments, should it happen, will certainly dampen housing demand.

“The best-selling private residential projects in February were: The M which sold 380 units at a median price of SGD2,439 psf; Treasure at Tampines which moved 97 units at a median price of SGD1,379 psf; and Parc Esta which transacted 53 units at a median price of SGD1,686 psf.

Meanwhile, the top selling EC project was the newly launched Parc Canberra which shifted 324 units at a median price of SGD1,111 psf. In February, developers sold 339 ECs – which are a hybrid of public and private housing – taking the total new home sales to 1,314 units during the month. 79% of the units sold at Parc Canberra ECs are priced below SGD1.2 million, hitting the sweet spot for first-timers or HDB upgraders.”

Top 10 Selling Projects in February 2020 (including EC)

Project Name Street Name Locality Units Sold in the Month Median Price ($psf) in the Month % sold to date (of total)
The M Middle Road CCR 380 2,439 73%
Parc Canberra (EC) Canberra Walk OCR 324 1,111 65%
Treasure At Tampines Tampines Lane OCR 97 1,379 46%
Parc Esta Sims Avenue RCR 53 1,686 79%
Jadescape Shunfu Road RCR 46 1,707 55%
Parc Botannia Fernvale Street OCR 40 1,376 98%
Parc Clematis Jalan Lempeng OCR 31 1,579 40%
View At Kismis Lorong Kismis RCR 22 1,696 45%
The Garden Residences Serangoon North View OCR 21 1,567 43%
Piermont Grand (EC) Sumang Walk OCR 15 1,106 60%

Source: Colliers International, URA

4 new launches in February 2020

Project Name Street Name Locality Total Number of Units in Project Units Launched in the Month Units Sold in the Month Median Price ($psf) in the Month % sold  (of launched)
The M Middle Road CCR  522  522  380  2,439 73%
Parc Canberra Canberra Walk OCR  496  496  324  1,111 65%
Verticus Jalan Kemaman RCR  162  20  13  1,999 65%
Dalvey Haus Dalvey Road CCR  27  27  1  3,228 4%

Source: Colliers International, URA analysis of developers’ sale

Ms Tricia Song, Colliers International’s Head of Research for Singapore commenting on the developers’ sale said:

“Price analysis of Developers’ sale
In assessing February’s data, we note that the brisk sales were driven largely by new launches, and selected projects that are competitively priced to attract value-conscious buyers.

Despite the raising of the COVID-19 outbreak alert level to Orange since 7 February, buyers reportedly braved the hot sun and social distancing measures to queue up for units at The M, as the project was seen to be at bargain pricing for a residential property in the city centre. The M is located in a vibrant central business district enclave, with rental catchment and abundant amenities including an MRT interchange nearby. The efficient layout and smaller format of units also make for affordable investment and owner-occupier purchases. Despite a median price of SGD2,439 psf, 76% of The M units that were sold in February were priced below SGD1.5 million.

Based on Realis data as of 16 March, around 55% of the developer sales (excluding ECs) in February 2020 were projects with units priced between SGD1 million and SGD1.5 million. We estimate 55% of the total developer sales in February 2020 were priced at the median price of SGD1,000-2,000 psf.

Outlook of developers’ sale for full year of 2020
At this stage, we are maintaining our forecast of 9,800 units of developers’ sales for the full year 2020, with downside risks. While the COVID-19 outbreak could weigh on market sentiment, we note that the surprise rate cuts by the US Federal Reserve recently meant that interest rates would remain lower for longer, and would be supportive of housing demand. Mortgage rates based on SIBOR have come off 30-40bps since the first 50bps rate cut by Fed, and should come off further.
However, rate cuts and Quantitative Easing are no magic bullets should the global and Singapore economy descend into a recession. Unemployment rate could then rise, and we should expect demand and prices for residential property to decline.

The 378-unit Kopar at Newton, on the government land sales (GLS) site at Kampong Java, is reported to start its preview on 28 March with prices starting from SGD2,100 psf. Meanwhile, OLA EC at Anchorvale reportedly received 1,163 e-applications, more than double the 548 units offered in the Spanish-themed development. Final pricing for the units at OLA is expected to be announced on March 19 or 20.

Other new launches in the next few months include Parc Central EC at Tampines Avenue 10 in the suburbs, 566-unit Penrose at Sims Drive in the city fringe, 120-unit The Atelier at Makeway Avenue and luxury project 19 Nassim in the core central region.”

Mr Paul Ho, chief mortgage officer at iCompareLoan, commenting on the developers’ sale said, “the first half of 2020 will be challenging for all businesses in Singapore. But still there are some bright sparks in the economy. As interest rates have fallen from the highs of last year, now may be the best time to get the best home loan you have always been looking for. It is also a good time to refinance.”

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