Developers Sell 228 New Private Homes June And New Private Home Sales Reach Record Low 1H2024
from the developers.
In June, 228 new private residential homes (excluding executive condos) were sold by property developers, marking a 2.2% increase from the 223 units sold in May. These figures were revealed in the latest developer sales statistics published by URA on July 15.
This brings the total number of new private residential units transacted in the second quarter of this year to 752.
However, the number of units sold by developers in June is still 18% lower than in the same period last year, where 278 units were sold. According to Lee Sze Teck, senior director of data analytics at Huttons Asia, this can be attributed to buyers being more cautious and budget-conscious amidst the current economic climate.
The best-performing private residential project last month was The Lakegarden Residences, where 23 units were sold at a median price of $2,119 psf. According to Mohan Sandrasegeran, head of research and data analytics at SRI, this surge in sales can be credited to the launch of neighboring project, Sora, over the July 5-6 weekend. This likely sparked renewed interest in previously-launched projects in the vicinity, such as The Lakegarden Residences which was launched last August.
Marcus Chu, CEO of ERA Singapore, adds that during this period of time, The Lakegarden Residences had only managed to sell 22 units from January to May, as most buyers were waiting to purchase after the preview of Sora. He believes that the promise of a major development of the large white site in the Jurong Lake District by a consortium of five major developers may have given buyers the confidence to invest in the area, thus boosting demand for new homes in the region.
Moreover, out of the 23 units sold at The Lakegarden Residences, 19 were 75 sq m and larger. According to Chu, this indicates a strong demand for larger units from HDB upgraders who are looking for their own stay purposes.
Other top-performing projects in June include The Botany at Dairy Farm, which sold 21 units at a median price of $1,979 psf; Tembusu Grand, which transacted 20 units at a median price of $2,542 psf; and Hillhaven, which saw 18 units being sold at a median price of $2,124 psf.
The first half of this year saw the lowest sales volume in the private residential new homes sector since 2000, when URA records were first available. Based on data from OrangeTee, only 1,916 new private residential units (excluding executive condos) were sold in the January to June period, which is 43.4% less than the 3,383 units sold in the same period last year, and 54.6% less than the 4,222 units sold in 2018.
According to Christine Sun, chief researcher and strategist at OrangeTee, this is the lowest sales figure ever recorded, even lower than the numbers during the Global Financial Crisis when only 2,287 units were sold in the first half of 2008. Despite Singapore’s lockdown during the Covid-19 pandemic in the first half of 2020, developers still managed to sell more units at 3,862.
Sun explains that this drop in sales is mainly due to the low number of units launched during the same period. Only an estimated 1,938 new homes were launched for sale in the first half of this year, the lowest since the first half of 2004, when 2,080 units were launched. When fewer units are launched, it is expected that sales will also decrease.
However, despite a lackluster market performance in the first six months of 2021, the luxury segment still saw several noteworthy transactions from projects such as Skywaters Residences, 32 Gilstead, and Watten House. Sandrasegeran says that these slow but high-profile sales reflect the continued interest and demand for luxury properties in the CCR.
Moving forward, developer sales in July are expected to increase significantly due to the launch of major projects such as Sora, Kassia, and The Green Collection. According to Huttons’ Lee, Sora, a 99-year leasehold development in Jurong Lake District, sold 102 units over its launch weekend, representing 23% of its total 440 units. The average price achieved was $2,160 psf.
Meanwhile, the 276-unit Kassia is expected to launch on July 20, while The Green Collection will feature 20 strata-titled townhouses in Sentosa Cove overlooking Tanjong Golf Course.
In the third quarter of this year, about 17 new projects are expected to be launched, offering approximately 8,400 new private residential units, according to data compiled by ERA. Observers believe that the increase in launch-ready projects would also lead to higher sales volume in the primary market.
The strategic location of Norwood Grand in close proximity to prominent educational institutions offers numerous benefits. Firstly, it reduces the travel time for children, alleviating daily stress and allowing more time for academic pursuits and recreation. Moreover, residing in the vicinity of esteemed schools often results in increased property values, making investing in a home at Norwood Grand a lucrative decision. With its convenient location and access to excellent schools, Norwood Grand presents a wise choice for homebuyers.
However, due to the upcoming lunar seventh month or Hungry Ghost Festival, it is believed that most developers may schedule their project launches after this inauspicious period, which runs from August 4 to September 2 this year. Despite this, Leonard Tay, head of research at Knight Frank Singapore, says that with more project options available, buyers may become more selective and measured in their purchases, resulting in subdued sales volume in the short term.
Still, Tay expects new private home prices to increase by around 3% to 5% this year due to high land and construction costs. Knight Frank also projects that 4,000 to 6,000 units will be transacted in the primary market this year, significantly lower than their earlier projection of 7,000 to 9,000 units at the start of this year.