Developers' private-home sales so far this year shoot past 2016's full-year figure

Singapore

DEVELOPERS' private home sales in the first eight months of this year have already surpassed that made in the whole of last year - with buying fervour in the market having been unrestrained even in August, which coincided with the lunar Hungry Ghost Festival.

An estimated 8,391 private residential units were sold between January and August, 60.3 per cent more than the corresponding period last year, and also higher than 2016's full-year sales of 7,972 units.

The 8,391 figure also beats the average 7,576 units sold in the three years from 2014 till last year; these were the years following the implementation of the total debt servicing ratio (TDSR) in June 2013.

These figures were compiled from the July and August new home-sales figures from the survey on developers done by the Urban Redevelopment Authority (URA) and the URA's second-quarter real-estate data.

Including executive condominiums (ECs), the total number of homes sold by developers is estimated to have crossed 11,700 units in the first eight months. This is a 42 per cent jump over the same period last year, and surpasses the 10,285-unit annual average registered from 2014 to 2016.

JLL national director of research and consultancy Ong Teck Hui said: "Overriding demand by buyers who are trying to purchase at close to the market trough will continue to keep transactions buoyant.

"At the current pace, we may be seeing sales of 12,000 to 13,000 private residential units by developers in 2017," he said.

PropNex Realty chief executive Ismail Gafoor suggested that the total number of transactions may even cross the 16,000 mark by year's end, given the existing positive trend and the buzz in the new private homes segment. His estimate comprises 12,000 private properties and 4,000 EC units.

"Buyers are more prepared to pick up existing projects that are rightly priced, fearing that prices might increase by more than 10 per cent come next year, with the recent aggressive land bids from recent land sales," he said.

The sales momentum of housing developers was sustained last month, despite there having been only one project launch; 1,241 private residential units and 340 EC units were sold.

The number of private residential units sold by developers in August was 165 per cent more than a year ago, and 12 per cent more than in July.

The total sales tally of 1,581 private homes and ECs in August was a 98 per cent surge over the figure a year ago, but a 24 per cent decline from July - the month when sales numbers were bolstered by Hundred Palms Residences in Yio Chu Kang Road, where all 531 units were sold within seven hours of the launch.

Analysts noted that the start of the lunar seventh month in late August did not put the brakes on the buying momentum; the Hungry Ghost Festival is when developers generally avoid launching new projects and some homebuyers avoid buying properties, as they believe it is an inauspicious time to do so.

Some 64 per cent of the launched private residential units in August were in the suburban region, which accounted for a corresponding 62 per cent share of private home sales in August.

The top-selling project in August was Le Quest, a mixed development in Bukit Batok by Chinese developer Qingjian Realty; 286 units were sold at a median price of S$1,309 per square foot.

The developer is said to be holding back the second phase of the sales launch in anticipation of a possible upturn in the property market.

Lee Nai Jia, who heads research at Edmund Tie & Company, said the improvement of primary sales in August will reinforce sentiments that the property market is bottoming out. The improvement in project sales is across the board, including projects that were launched earlier.

The steady sales of previously launched projects in a quantum-sensitive market is paring down developers' inventory of palatable quantums, which will affect future monthly sales performance if new launches are not forthcoming, CBRE head of research Desmond Sim warned.

"CBRE is still expecting a U-shaped recovery in prices, but the current trough cannot remain at this level much longer as land is increasingly being bought at higher prices," he said.

"September's sales may be impacted by the Hungry Ghost month and the possibility that there may be limited launches this month."

The handful of launches in the rest of this year include Parc Botannia in Fernvale Road by Sing Holdings and Wee Hur; Kandis Residence by Tuan Sing; Rivercove Residences EC by Hoi Hup Realty and Sunway Developments; and City Development's New Futura in District 9.