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Developers' sales of private homes hit 10-month high in May

Data does not include sales in delicensed projects; CapLand gets creative with marketing in two projects

MCL Land's Lake Grande, a stone's throw from Jurong Lake and the Lakeside MRT station, is a 17-storey project with 710 units in one- to five-bedroom configurations. The average price, net of discounts, is likely to be around S$1,350 psf, said its chief executive Koh Teck Chuan.


DEVELOPERS' sales of private homes surged to a 10-month high last month on the back of new launches Gem Residences and Stars of Kovan and steady sales in projects released earlier.

Sales are expected to moderate this month, assuming there are no new launches. However, things should pick up again in July, when developers of at least one private condo and two executive condo (EC) projects are expected to begin sales bookings.

Attention in the market is also shifting to the impressive sales being chalked up quietly by developers of completed projects that have been delicensed. The sales data of such projects is not captured in the developers' housing sales stats released by Urban Redevelopment Authority (URA), which covers only projects that still have a housing licence.

Based on the URA's numbers released on Wednesday, developers last month found buyers for 1,056 private homes, excluding ECs. This was 41.2 per cent more than the 748 units sold in April and 64.2 per cent more than the 643 units sold in May last year.

Among developers' top selling projects last month was Gem Residences in Toa Payoh, with 312 units sold at a median price of S$1,431 per square foot (psf). Stars of Kovan also fared well; Cheung Kong Property moved 76 units at a S$1,414 psf median price. These two projects accounted for 36.7 per cent of the 1,056 private home units sold by developers and 56.4 per cent of the 1,345 new private homes launched last month, JLL said.

Property consultants noted the sterling location of these projects; Gem is near Braddell MRT station, and Stars of Kovan, Kovan MRT station.

ERA Realty Network key executive officer Eugene Lim observed that investors were the main drivers of sales at the two launches, with the one- and two-bedroom units at Gem Residences the most popular among buyers.

The URA's data also showed that developers last month continued to move units in projects that were launched earlier, such as The Poiz Residences (47 units at a median price of $1,411 psf), Botanique at Bartley (36 units at $1,292 psf median price) and Sturdee Residences (36 units at median price of $1,636 psf).

Alan Cheong, research head at Savills Singapore, said: "For June - if there are no large new launches - developers' sales may settle back to between 550 and 600 private homes (excluding ECs)."

He described this level of monthly sales the "new norm" based on data for the past three months, if there are no new launches; this is higher than the "previous norm" of 350 to 400 units.

No new EC units were launched in May, but developers found buyers for 332 units in EC projects that were released earlier. This figure was down from the 547 EC units which developers moved in April, but more than the 210-unit sales in May last year.

The best-selling EC projects last month included Bellewaters, The Vales and The Terrace, each of which found 37 to 40 buyers at median prices of between S$788 psf and S$800 psf, noted JLL's head of research and consultancy Tay Huey Ying.

She noted that although the 1,056 private homes sold by developers in May was the highest in 10 months, it was in fact the lowest first-half peak in the past three years. The H1 peak in 2014 was 1,488 units in May of that year; the H1 peak last year came in April 2015, at 1,167 units.

In the first five months of this year, developers sold 3,223 private homes and 1,641 EC units. For the whole of last year, the figures were 7,440 private homes and 2,550 EC units.

PropNex chief executive Ismail Gafoor expects full-year sales of 7,000 to 8,000 private homes and about 3,000 EC units. "With no changes to the property-cooling measures on the horizon in 2016, transaction volumes will continue to be launch-driven, largely dependent on the price and location of the project."

OrangeTee's senior manager of research and consultancy Wong Xian Yang that while there are signs of improving sentiment as reflected in the relatively buoyant developer sales in the past three months, buyers remain "price- and quantum-sensitive", given that the cooling measures have remained intact.

E-applications for two EC projects are slated to begin next week. These are for Hao Yuan's Northwave in Woodlands View and Sim Lian's Treasure Crest in Anchorvale Crescent, where the indicative average price is said to be between S$735 and S$755 psf.

MCL Land also expects to begin sales of its Lake Grande condo, sited a stone's throw from Jurong Lake and the Lakeside MRT station, in the fourth weekend of July. The average price, net of discounts, is likely to be around S$1,350 psf, said its chief executive Koh Teck Chuan.

The 17-storey project will have 710 units, in one- to five-bedroom configurations.

Around August or September, EL Development is planning to soft launch Parc Riviera, a 752-unit condo along West Coast Vale.

CBRE plotted the 12-month rolling total of the number of private homes sold by developers and found evidence of a stablising market. This measure smoothens out the monthly fluctuations that occur due to new launches or a dearth of new launches, so that a clearer sales pattern emerges.

CBRE Research's head of Singapore and South-east Asia Desmond Sim said: "A distinct pattern … is that traction from previously-launched projects remains encouraging, despite a longer decision-making process and lengthier transactional procedures.

"This can be attributed to buyers sitting on the fence who were swayed to projects nearing completion as well as increased incentives offered by developers to both buyers and marketing personnel. Overall, sales from previously launched projects is expected to perform slightly better year on year."

Market observers said that outside the scope of the sales data on licensed housing projects collated by URA, developers of completed projects that have been delicensed have been achieving impressive sales after rolling out fresh incentives.

A delicensed project is no longer regulated by the Housing Developers (Control and Licensing) Act and its rules; its developer no longer has to disclose sales updates to URA and has leeway to launch novel marketing schemes for these projects.

In the Grange/Leonie Hill roads vicinity, the developer of OUE Twin Peaks is said to have sold 33 units in April, another 90 last month and some 17 units so far this month in one of the project's two 231-unit towers. It is now left with just 12 units in the tower.

In late March, OUE launched a deferred-payment scheme packaged with a 12 per cent discount; it also offers another scheme that gives buyers a longer option-exercise period, packaged with a 15 per cent discount. (OUE has been reported to have received offers from several potential buyers to buy the second tower en-bloc.)

At another delicensed project, Ardmore Three, developer Wheelock Properties sold 12 units in April and a further 20 units last month after introducing a package comprising a 15 per cent discount and a 15 per cent additional buyer's stamp duty rebate.

CapitaLand has confirmed its recent introduction of a deferred-payment scheme for most of its remaining units at its delicensed projects, The Interlace and d'Leedon. A CapitaLand spokeswoman said the "stay-then-pay" schemeis aimed at helping owner-occupier buyers manage their finances. All buyers, regardless of whether they take up this offer, are entitled to a 15 per cent discount off the list price.