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July's new home sales recover from June lull
THE private housing market regained some momentum last month, as developers sold 1,091 private homes (excluding executive condominiums), more than double the 536 units sold in June.
Consultants attribute the marked increase to the pick-up after the mid-year lull. June is when buyers tend to hold off buying and developers hold back new launches due to the school holidays. But consultants say July's performance also points to some regained confidence among developers to launch new projects.
Not all, though. CapitaLand was cautious with its landed Victoria Park Villas project, launching just six out of its 109 units in its initial launch, although it sold all six units at a strong S$4.3 million to S$4.9 million each. This indicates keen interest in landed homes which are limited in supply, said Ong Teck Hui, national director of research & consultancy at JLL.
The boost in July's sales also has to do with the larger launch volume of 624 units in July, more than twice June's 234 launched units.
Mohamed Ismail Gafoor, CEO of PropNex Realty, said that the primary market remains strongly launch-driven, evident in the robust sales in March and May this year, which were respectively driven by the launches of Cairnhill Nine and Gem Residences.
Commenting on the figures released by the Urban Redevelopment Authority on Monday, Mr Ong noted that the 1,091 private homes sold in July was the highest monthly sales in 2016. "This suggests that the market outlook, which turned positive in the earlier part of the year, seems to be carrying through past mid-year."
Mr Mohamed Ismail added: "The surge in primary home sales in July was largely in response to the sensitive pricing of the only major private property launch in the month, Lake Grande, which reignited buying interest and accounted for more than 40 per cent of the total number of units sold."
MCL Land's Lake Grande was the best-selling private residential projects in July, moving 464 units out of the 500 launched at a median price of S$1,368 per square foot (psf). This represents a 93 per cent take-up rate, and is testament to the growing appeal of the Jurong Lake District vicinity.
Mr Mohamed Ismail added that some buyers could also have hastened their purchase decisions in July to avoid buying in the inauspicious Hungry Ghost Month in August.
Including ECs, a private-public housing hybrid, some 1,486 units were launched (versus 234 in June), and 1,921 sold (versus 768 in June).
The EC market was active in July, with the launch of Sim Lian's Treasure Crest and Hao Yuan Investment's Northwave, as well as steady sales at several launched EC projects that continued to be actively marketed.
In all, 830 EC units were sold in July. The best-selling EC projects in July were Treasure Crest, Bellewaters and Sol Acres (see table).
The total number of new private homes sold in the first seven months of 2016 stands at close to 5,000 units, 6 per cent lower than the same period last year. The drop is largely due to the colossal launch of most of the units at the 1,390-unit High Park Residences and its strong take-up last year.
OrangeTee noted that the primary market is showing signs of stabilisation, with July's new home prices staying resilient, without any substantial drop in prices across projects. Its analysis also showed that sales from previously launched projects rose about 22 per cent in the January-July period, compared to a year ago.
"This lends strength to the proposition that the primary market may have bottomed and is in recovery," said research and consultancy head Wong Xian Yang. "But it is hard to envisage a V-shaped recovery given that cooling measures remain in place and the economy remains weak. Barring an unexpected deterioration in the global economy, the primary market is likely to stabilise around current levels."
Consultants generally expect sales performance to hover at about 500 to 700 units every month for the rest of the year, culminating in a total sales volume of 7,000 to 8,000 units for the whole year, excluding ECs.
August should be quiet amid the Hungry Ghost Month and lack of launches, they say. Two major projects, Parc Riviera at West Coast Vale by EL Development, and the Forest Woods in Serangoon by City Developments, are expected to launch in September.