New private home sales plunge 60.5% in February

Singapore

DEVELOPERS in Singapore sold 645 new private homes in February, down 60.5 per cent over January's 1,632 units amid a paucity of new launches.

While overall sales volume fell, wealthy buyers continued their buying spree, with more picking up homes costing over S$3 million.

February marked the lowest monthly sales since May 2020's 487, and down 33.9 per cent from 976 achieved in February 2020.

The figures - released by the Urban Redevelopment Authority (URA) on Monday - exclude EC units, which are a public-private housing hybrid.

Including the 111 ECs sold, developers moved 756 new homes in February, down 64.4 per cent from January and 42.5 per cent lower from a year ago.

Developers launched 167 units for sale in February against 2,600 in January. Including ECs, a total of 3,300 units were launched for sale in January.

January's large number was due to three projects - the mega 1,862-unit Normanton Park, which moved 625 units, followed by the 700-unit Parc Central Residences executive condominium (EC), which sold 417 units, and the 429-unit The Reef at King's Dock that sold 221 units.

The sharp drop in sales can be attributed to Chinese New Year, a period when developers usually hold back launches, said Lee Sze Teck, Huttons Asia director of research.

"This is also the lowest number of units launched for sale in February. The previous low was in February 2018 which also coincided with Chinese New Year," he said.

Sales in the primary market are very much supply-led, he said.

"When there are new project launches to excite the market, sales volume will be higher. Take for example in February 2020, The M was launched for sale, pushing monthly sales close to 1,000 units," he said.

"If The M was not launched in February 2020, sales will be around 600 units. After adjusting for project launches, developers' sales in February 2021 are on par with a year ago. Demand for homes is still healthy in the market," Mr Lee added.

Wealthy buyers were in fine form last month despite the slower activity.

The well-heeled continued with their buying spree, said Christine Sun, OrangeTee & Tie senior vice-president of research & analytics.

Last month, 45 new homes were sold for at least S$3 million, 10 of which cost more than S$5 million, said Ms Sun.

The previous high was January 2020 with 45 units (same number as February 2021). Going back further, the last peak was in May 2018 with 56 units, she said.

The priciest include a 308 sqm large unit at Meyerhouse which was transacted at S$8.2 million, three at The Avenir for more than S$6 million each, a 165 sqm unit at the Boulevard 88 sold for S$6.6 million and two at Amber Park sold for over S$5 million each.

Consultants also noticed more interest in District 15, especially those near or facing the sea.

"District 15 saw a spike in interest in February," said Mr Lee. He counted 50 units sold in District 15 last month, against 32 in January. The 50 included Amber Park (20 units), Seaside Residences (10 units) and Nyon (six units).

"We believe that some buyers are beginning to appreciate that supply in District 15 will be constrained in the future as a result of tighter government rules on the average size of dwelling units and stepping in to buy a seaside-living lifestyle," said Mr Lee.

In October 2018, URA increased the average size of dwellings to either 85 or 100 sq m from 70 sq m. Marine Parade, Joo-Chiat Mountbatten, Telok Kurau are affected by 100 sq m rule, he said. These three areas mostly fall within District 15.

The bigger average size dwellings will mean less new waterfront homes, said Mr Lee.

Consultants say February's low volume does not mean slowing demand.

Said Ong Teck Hui, JLL senior director, research & consultancy: "Developers launched only 167 units for sale in February, a record low since December 2018 when 101 units were placed on the market. Besides holding back from launching new projects due to the festive period, developers seemed to be in no hurry to launch more units as the market is on their side with prices trending upwards."

"The low new home sales volume in February is not indicative of slowing demand from buyers," said Mr Ong.

This is attested to by a fairly buoyant resale market in February, which saw 1,039 private residential transactions (based on URA Realis data), just 16.6 per cent lower than in January, he said.

It is also higher than the average monthly resale volume of 894 units in 2020.

"Therefore, we expect launch activities to resume and new private home sales momentum to pick up in the coming months," said Mr Ong.

Added Nicholas Mak, ERA Singapore head of research & consultancy: "The low launch volume was partly due to the Lunar New Year lull period."

A stronger reason was because developers had already released more units than the market can absorb in the 3-month period from November 2020 to January 2021, he said.

During the 3-month period, developers released 5,324 private housing units, excluding ECs, which was almost half of the 10,883 units released for the whole of 2020, said Mr Mak.

In the coming months, about 20 new residential projects, including EC, with a total of 4,270 units could be launched, he said.

The primary market sales volume will pick up again when property developers release more units for sale, especially when highly anticipated projects such as one-north Eden and Provence Residence (EC), are launched, said Mr Mak.

one-north Eden, a 165-unit project, is some 400 metres to the Buona Vista MRT, and the area has had no new launches for several years, he said. Buona Vista is home to many high-tech companies.

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