New private home sales double in March as buyers snap up luxe condos

Singapore

DEVELOPERS in Singapore sold 1,296 new private homes in March, double that of February's 645, with buyers snapping up luxury condos after a break during Chinese New Year.

Wealthy buyers are expected to continue to be in the focus as half of the new projects slated to launch this year are in the expensive core central region (CCR).

Singapore is the hot favourite among well-heeled investors and wealthy overseas buyers looking for trophy properties, said Christine Sun, OrangeTee & Tie, senior vice-president, research and analytics.

"Backed by the prospects of further price growth and a better leasing environment, foreign demand is expected to return gradually. We may see more luxury homes being sold in the coming months as more luxury properties are slated to be launched," added Ms Sun.

March's strong volume brings first-quarter 2021 sales to 3,574 units, the highest quarterly figure since the second quarter of 2013 where 4,538 units were sold, noted Lee Sze Teck, Huttons Asia director of research. With Q1 data out, some consultants have revised upwards full-year 2021 sales to between 9,000 to 10,000 units from 8,000 to 9,000.

This year's Q1 sales of 3,574 units "is even higher than the third quarter of 2020 when Singapore exited a 'circuit breaker' and saw pent-up demand driving sales to 3,517 units. Buyers flush with cash and seeking stability are investing in stable assets like properties," said Mr Lee.

In March, the number of transactions in the most expensive region, CCR, was 546 units or 42.1 per cent of new sales, an eight-year high. Sales in rest of central region (RCR) and outside central region (OCR) made up 388 (29.9 per cent) and 362 (27.9 per cent) respectively. CCR, RCR and OCR sales in February 2021 were 58, 325 and 262 respectively.

The high CCR sales which accounted for 42.1 per cent or 546 units for March were helped by transactions in Midtown Modern, RV Altitude and The M. The previous high in the CCR was in November 2013, where 668 units were sold. The 558-unit Midtown Modern saw 368 homes or 66 per cent move at a median price of S$2,726 per square foot (psf). RV Altitude sold 77 units.

The figures - released by the Urban Redevelopment Authority (URA) on Thursday - exclude executive condominium (EC) units, which are a public-private housing hybrid. Including the 77 ECs sold, developers shifted 1,373 new homes in March, up 82 per cent from February and a 52 per cent increase from a year ago.

While March buyers mainly snapped up condos in the CCR, they went for the smaller, lower-priced units. Median home prices transacted in the CCR averaged S$1.66 million last month, said Goh Jia Ling, CBRE, South-east Asia manager, research.

Mr Lee said 44 per cent of the transactions in March were priced below S$1.5 million, 32.9 per cent were between S$1.5 million and S$2 million and 23.1 per cent were above S$2 million. Some 82.2 per cent of purchases were by Singaporeans, with permanent residents and foreigners making up 13.4 per cent and 4.3 per cent, respectively. There were 10 purchases by Singaporeans for properties priced S$5 million and above. In contrast, there were only two such purchases by foreigners.

Following Q1 2021's performance, coupled with increasing confidence from recovering economies, some consultants think full-year sales could top 10,000 units.

Advance estimates this week showed a slightly positive gross domestic product growth of 0.2 per cent year-on-year in Q1 2021, with full-year growth likely to exceed the upper end of the official 4-6 per cent forecast range.

Said Ismail Gafoor, CEO of PropNex: "In view of the brisk sales in Q1 2021 - at a total of 3,574 units (up by about 58 per cent year-on-year) - we now project private new home sales to likely cross 9,000 units for the whole of 2021, barring any new cooling measures being rolled out."

Despite last year being Singapore's worst-ever recession, a Knight Frank Wealth Report 2021 showed that the number of ultra-high net worth individuals (UHNWI) in Singapore rose 10.2 per cent or by 345 to 3,732 in 2020, said Leonard Tay, Knight Frank Singapore head of research. The report, released last month, defines UHNWIs as those with net worth of at least US$30 million, including their primary residence.

In tandem with Singapore's attractiveness among family offices, it was observed that both foreign and local homebuyers were looking to penthouses or units with more than 3,000 square feet, according to Mr Tay.

"With the limited availability of newly launched penthouses in previous months, penthouses in the resale market were sought-after by these UHNWIs who place greater priority on quality and living spaces," he added.

Now with more upcoming launches in the CCR, UHNWIs will have more choice when hunting for new units with large sizes.

He also noted that "notwithstanding the fall in median monthly household income from work in 2020, there has nevertheless been growth in this household income over the past 10 years (from 2010 to 2020) by almost 45 per cent, outpacing the 12.8 per cent increase in private residential prices over the same period."

Assuming that no new measures are announced or there is an unexpected resurgence of community infections of Covid-19 that could unhinge demand, there is every chance that the primary market would chalk up around 10,000 new sales in 2021, said Mr Tay.