Despite a full month of circuit breaker measures and the absence of physical showflat viewings, May developers’ sales jumped more than 75 per cent
Data released by the Urban Redevelopment Authority (URA) of Singapore on Friday, 15 June, showed that 486 new private homes, excluding Executive Condominiums (ECs) were sold in May, up by 75.5% from the 277 units that were shifted in April 2020. On a year-on-year (YOY) basis, developers’ sales declined 48.9% from the 952 units (excl. ECs) transacted in May 2019.
Despite a full month of circuit breaker measures and the absence of physical showflat viewings, May developers’ sales jumped 75.5% month-on-month (MOM), albeit from a very low base in April, as buyers weigh discounts dangled and lower borrowing costs amidst virtual viewings and online research.
This brings the May developers’ sales of private homes (excluding ECs) to 2,912 units in year-to-May, 17.4% lower than the 3,527 units in year-to-May 2019.
May developers’ sales saw 23 ECs being sold – which are a hybrid of public and private housing – also higher than the 16 ECs sold in April. This brings total developer sales (including ECs) in May to 509 units, up 73.7% MOM and down 46.5% YOY.
With the circuit breaker still in force during the entire month of May, developers did not launch any new projects – the sales came entirely from earlier-launched projects, with which buyers could be familiar after having visited their showflats earlier, or which have registered sufficient sales to inspire confidence.
Ms Tricia Song, Head of Research for Singapore at Colliers International said, “The best-selling private residential projects in May were: Treasure at Tampines which moved 56 units at a median price of S$,360 psf; Parc Clematis which sold 55 units at a median price of S$1,599 psf and The Florence Residences which moved 54 units at a median price of S$1,513 psf.”
Top 10 Selling Projects in May 2020 (including EC)
|Project Name||Street Name||Locality||Units Sold in the Month||Median Price ($psf) in the Month||% sold to date (of total)|
|Treasure At Tampines||Tampines Lane||OCR||56||1,360||53%|
|Parc Clematis||Jalan Lempeng||OCR||55||1,599||46%|
|The Florence Residences||Hougang Avenue 2||OCR||54||1,513||47%|
|Parc Esta||Sims Avenue||RCR||45||1,680||87%|
|The Tapestry||Tampines Street 86||OCR||23||1,325||88%|
|Stirling Residences||Stirling Road||RCR||22||1,910||78%|
|Affinity At Serangoon||Serangoon North Avenue 1||OCR||21||1,565||68%|
|Piermont Grand||Sumang Walk||OCR||17||1,128||64%|
|Kopar At Newton||Makeway Avenue||CCR||16||2,307||26%|
Source: Colliers International, URA
* CCR: Core Central Region; RCR: Rest of Central Region; OCR: Outside Central Region
Ms Song said, “The MOM increase was surprising, due to the full month of expected inactivity due to the circuit breaker. We believe more buyers took the plunge as some developers have dangled discounts for “star buys” and attracted interest, in particular those prospective buyers who already were contemplating a purchase before the circuit breaker.”
“In addition to construction delays and potential hikes in construction costs, buyers who have stable income or savings could find greater comfort to lock in a purchase, especially at the currently low home loan rates. That said, the monthly figure of 400+ units is still extremely low, compared to the normalized 900 – 1,000 units per month, before circuit breaker and the coronavirus (COVID-19) outbreak.
Buyers are generally still price sensitive; we estimate 86% of the total developer sales in May 2020 were priced at the median price of S$1,000 – 2,000 psf, compared to 58% in April.
In the higher-end spectrum, selected 99-year leasehold projects saw good traction. Martin Modern and Fourth Avenue Residences saw sales pick up significantly in May from April, as they each sold 7 units in May, compared to 1 and 2 respectively in April. Kopar at Newton also continued to sell 16 units in May, after its launch in March. These could be investors attracted by the discounts or star buys offered for prime locations.”
Mr Desmond Sim, Head of Research, Southeast Asia, CBRE, said:
“Despite the fact that sale galleries remain closed under the “circuit breaker” period, there is no tripping of the residential new sales figures for May 2020. A total of 486 new homes (excluding ECs) were sold for this month where physical viewings are not allowed and no new launches.
Electrifying deals still flowed from previously launched projects located in the OCR with top performing projects for the month including Treasure at Tampines (56 units), Parc Clematis (55 units) and The Florence Residences (54 units).
Overall, the units that were transacted in May were also of lower quantum where data has shown that median prices have fallen by 15.3% from S$1.43 million from the start of 2020 to S$1.21 million in May 2020. Anecdotal evidence have also pointed to some developer discounts and incentives which may have helped to give buyers the final push, particularly for those who have been waiting on the side-lines, possibly from end of last year. The lowered interest rate environment was also a much needed jolt. Uncertainties and fluctuation in the equities and bond markets may have also motivated some buyers to look back into residential properties, which have long been regarded as a safer haven.
To date, new home sales figures from Jan to May 2020 totalled at 2,912 units, representing a decline of 17.4% y-o-y. Taking into account that economic uncertainty is likely to worsen in H2 2020, CBRE Research maintains that new home sales volume forecast is expected to fall between 4,000 and 5,000 units (excluding ECs) for the whole of 2020.”
Mr Paul Ho, chief mortgage officer at iCompareLoan, commenting on the May developers’ sales said: “the month-on-month increase is indeed surprising, but developers have been dangling many “carrots” for buyers, and some buyers may have thought that this is the best time to buy.”