New private home sales take a hit in May on the back of heightened measures
But month-on-month fall in sales volume isn't as drastic as during the circuit breaker last year
Singapore
TIGHTER restrictions to curb a resurgence in Covid-19 cases dampened new private home sales in May, although the impact wasn't as severe as during the circuit breaker in the corresponding month last year.
According to estimates from analysts (based on caveats lodged), developers sold 863 private homes in May - excluding executive condominiums (ECs), which are a public-private hybrid - nearly 32 per cent less than the 1,262 units moved in April.
However, comparing year-on-year, the tally for May surged over 77 per cent from the 487 homes sold in the corresponding month in 2020 when the circuit breaker forced developers to shutter their sales galleries.
The Urban Redevelopment Authority will release the official monthly sales data for May on June 15.
OrangeTee & Tie senior vice-president (research & analytics) Christine Sun highlighted that the month-on-month fall in sales volume in May wasn't as drastic as during the circuit breaker last year.
Ms Sun said: "During the first month of the movement restrictions, there were only 277 new transactions recorded in April 2020, tumbling 58 per cent from 660 units sold in March 2020. Comparatively, last month's new home sales were 211.6 per cent higher."
Nicholas Mak, head of research & consultancy at ERA, reckons that the smaller drop in transactions this time around could be a result of homebuyers having grown more accustomed to the new normal, which includes virtual viewings.
He went on to say: "The relatively good housing sales record for May this year could also be due to fact that the first two weeks of May was not affected by the new tightened restrictions. As a result, some developers managed to launch their projects within the earlier weeks of the month."
Property launches were in short supply in May as the government urged the public to stay home. The few launches that did take place included MCC Group's 413-unit EC Provence Residence at Canberra Crescent, MCC Group and HY Realty's One Bernam at Tanjong Pagar and Shun Tak's super luxury freehold development Park Nova at Tomlinson Road. According to PropNex, 12 units at Park Nova were transacted at a median price of S$5,006 per square foot (psf).
Under the government's heightened measures, which kicked in on May 16, sales galleries are limited to groups of two including the property agent, while the maximum capacity is reduced to 16 square metres (sq m) per person.
Safe-distancing measures will be relaxed from June 14 onwards, with the maximum capacity at show galleries increased to 10 sq m per person, while the maximum number of people in each group will go up from two to five.
Including ECs, new home sales in May reached 1,189 new homes, 11.4 per cent lower than the number of homes sold in April and more than double the 510 homes developers sold in May 2020.
The top selling project last month was the 413-unit EC, Provence Residence, where 229 units were sold at a median price of S$1,155 psf. Sales in May were also driven by One Bernam, where 82 units were purchased at a median price of S$2,465 psf. Meanwhile, Sim Lian's previously launched project, Treasure at Tampines, sold another 63 units at a median price of S$1,423 psf.
New home sales in May were led by the Outside Central Region (OCR), which accounted for some 45 per cent of sales despite no new launches in the OCR during the month, according to data from PropNex.
Meanwhile, the Rest of Central Region (RCR) comprised roughly a third of all transactions (excluding ECs), thanks partly to 52 units moved at Normanton Park.
Stripping out ECs, the bulk of the top 10 best selling developments in May were located in the OCR, "reflecting the sustained demand from owner-occupiers and HDB upgraders," said Ismail Gafoor, chief executive of PropNex.
He added: "We expect the unsold supply of new mass market homes to remain tight, and some buyers may turn to resale properties, if they are unable to find a suitable unit in the primary market."
Data from OrangeTee showed that homes in the S$1 to S$1.5 million range remained the sweet spot for buyers, with over 41 per cent of transactions (excluding ECs) in May falling within this price range. A little over 25 per cent of homes were between S$1.5 and S$2 million, while nearly 20 per cent of transactions were for new homes in the S$2 to S$3 million bracket.
The dearth of launches continues in June, which suggests that new home sales could remain soft this month, said Mr Gafoor, adding however that buying interest remains healthy. He added: "We should see a pick-up in sales momentum from July onwards as developers roll out more launches."
Extrapolating from February - where there were no launches - sales for June could clock 700 to 750 units, said Huttons' director of research, Lee Sze Teck.
According to Mr Mak, upcoming launches in the OCR include Allgreen Properties and Kerry Properties' mixed-use development Pasir Ris 8, which has 487 units, and Frasers Property's 496-unit EC project Parc Greenwich at Fernvale Lane.
"(Pasir Ris 8) is likely to be highly anticipated as it is conveniently linked to Pasir Ris MRT station," Mr Mak added.
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