Analysts cite attractively priced launches, pent-up demand among reasons for increase
Hungry ghosts were no match for hungry home buyers as new home sales jumped to an 11-month high last month, with developers selling 1,256 non-landed private homes, up 16.3 per cent from the 1,080 private homes sold in July. Year on year, sales were up 11.8 per cent from 1,123.
Instead of slowing during the typically quiet Hungry Ghost month, new home sales surged for a fourth straight month amid Singapore’s worst recession. Last month’s sales marked the best August performance in eight years, noted Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.
In contrast, only 325 new units were sold in August 2008 amid the global financial crisis, and just 756 in August 2013 after a round of cooling measures.
Attractively priced new freehold launches coupled with pent-up demand, following a two-month-long circuit breaker when show-flats were shut, spurred sales last month. Analysts also cited low interest rates and a segment of buyers with still-healthy job prospects.
Mr Ong Teck Hui, senior director of research and consultancy at JLL, cited bright spots in the economy where some businesses are stable or even growing. These include the technology, biomedical, healthcare, electronics and precision engineering sectors.
“Those in more stable employment would have greater confidence in purchasing a property despite the recession,” he said.
The 0.3 per cent increase in the Urban Redevelopment Authority’s (URA) second-quarter private residential price index may have fuelled the perception that prices, at worst, may soften slightly. This may have prompted some home buyers to take the plunge, Mr Ong added.
More new units were launched ahead of the Hungry Ghost month, which started on Aug 19. There were 1,582 private homes launched last month, up 82 per cent from 869 units in July, and nearly 56 per cent higher than 1,015 units a year ago. The figures exclude executive condominium (EC) units, which are a public-private housing hybrid.
Last month’s take-up was led by projects in the city fringe, or the rest of central region, with 622 sales, followed by 506 units sold in the suburbs, or outside the central region, and 128 in prime districts, or the core central region, according to JLL.
The three new launches – Forett At Bukit Timah, Noma and Mooi Residences – made up 19.1 per cent of total sales last month.
Forett At Bukit Timah sold 213 units, or 34 per cent of its 633 units, in the first month of its launch, “a rather outstanding performance, due to the freehold land tenure and competitive price point of $1,933 psf. Efficient layouts meant that median price quantum per unit works out to be $1.45 million, which fits the sweet spot for most families”, said Ms Tricia Song, head of research for Singapore at Colliers International.
Noma, a 50-unit freehold development in Geylang, sold 34 units, or 68 per cent, within a weekend after it offered early-bird discounts, with one-bedders starting at $600,000 and two-bedroom units starting at $900,000, Ms Song said.
Including EC units, 1,307 new homes were taken up last month, up 14.4 per cent from July, and about 12 per cent higher than 1,168 a year ago, the URA data showed.
Sales picked up for earlier launches like The Garden Residences and The Woodleigh Residences – both overtook Jadescape to make the top five best-selling condominiums.
Ms Song said last month’s sales also showed strong interest for attractively priced freehold city fringe projects. Last month, city fringe projects accounted for the bulk of sales at 49.5 per cent, compared with 38.8 per cent in July. The suburbs, or the proxy for the mass market segment, made up 40.3 per cent of total sales last month, compared with 50.7 per cent in July.
With the gradual reopening of the economy and the setting up of fast lanes for essential travel, the number of transactions from foreign buyers rose 74 per cent to 54 last month from 31 in July, PropNex chief executive Ismail Gafoor said.
A version of this article appeared in the print edition of The Straits Times on September 16, 2020, with the headline ‘New home sales surge to 11-month high in Aug’