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Sales of new homes moderate as yr-end holidays begin

URA data shows a slowdown in new home launches as developers switch sales strategies in recovering market

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Last month's top-selling private residential project was Parc Botannia along Fernvale Street in the Sengkang area, with 253 units sold at a median price of S$1,287 per square foot. The project, by Sing Holdings and Wee Hur, was launched during the month.

Singapore

THE festive Ong Teck Hui, national director of research and consultancy at JLL, said: "With the onset of the year-end holiday period and the market moving in favour of sellers, there is no hurry for developers to continue launching more units from their projects. Of the 450 private homes launched in November, only 47 units were new releases from previously launched projects, a 76.7 per cent plunge from the previous month and the lowest monthly figure in the year. This has reduced buying options, contributing to moderate sales figures."

Although the 450 private homes launched is 86 per cent higher than the month of October, it is a 67 per cent drop from a year ago. From January to November this year, about 11,127 new private homes have been sold, 39 per cent higher than the same period in 2016.

There were three new private residential projects launched in November. Rezi 35, which launched its 44 units, found buyers for 12 units at a median price of S$1,595 per square foot (psf). The 735-unit Parc Botannia launched 357 units, with 253 taken up at a median price of S$1,287 psf. This was the best-selling project in November. Link Residence @ Holland, a landed development, placed two of its four units on the market but did not sell either.

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Mr Ong said that it is "interesting" how developers' pricing and sales strategies have changed from a softening to a recovering market. For one thing, developers are taking their time to release new units, while daring to command higher prices. Case in point: Parc Botannia which launched only half its units and managed to sell 70 per cent at a median price of S$1,287 psf, versus the nearby High Park Residences which launched 80 per cent of its 1,399 units two years ago and sold nearly all at a median price of S$989 psf in the month of launch.

In similar vein, ZACD Group executive director Nicholas Mak noted that in the 12-month period from December 2016 to November 2017, with the exception of April, real estate developers have been selling more units than the number of units they released for sale each month. This again illustrates not just robust home-buying demand, but also a hold-back among developers who appear to be waiting for a further price recovery next year. "The take-up rate (the number of units sold divided by the number of units launched in a month) was still very robust at 174 per cent in November. The take-up rate has been above 100 per cent for seven straight months," he said.

Meanwhile, new EC sales softened in November, falling 30 per cent from the previous month to 148 units. This is the lowest monthly new EC sales tally since February 2016. Only 1,555 new EC units were launched in the first 11 months of 2017, a 41 per cent drop from the same period last year.

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