Developers Sell 228 New Private Homes June And New Private Home Sales Reach Record Low 1H2024
In June, there was a slight uptick in property developers’ sales of 228 new private residential homes (excluding executive condos), representing a 2.2% increase from the 223 units sold in May. This is according to the latest figures released by URA on July 15. Considering the sales in June, a total of 752 new private residential units were sold in the second quarter of 2021. However, the number of units sold by developers last month was 18% lower compared to the same period in the previous year. According to Lee Sze Teck, senior director of data analytics at Huttons Asia, buyers remain cautious and budget-conscious amidst the current economic climate.
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Last month, The Lakegarden Residences was the most popular private residential project, selling 23 units at a median price of $2,119 psf. Mohan Sandrasegeran, head of research and data analytics at SRI, believes the launch of nearby project Sora over the July 5-6 weekend renewed interest in already-launched developments in the area, including The Lakegarden Residences which was launched in August last year. Marcus Chu, CEO of ERA Singapore, notes that from January to May this year, The Lakegarden Residences sold only 22 units as most buyers were waiting for the preview of Sora.
Chu explains that the announcement of a major development on the large white site in Jurong Lake District by a consortium of five major developers could have given buyers the confidence to purchase a property in the JLD, and fueled demand for new sale homes in the area. He adds that out of the 23 units sold at The LakeGarden Residences, 19 were 75 sq m or larger, indicating a strong demand for larger units, possibly from HDB upgraders looking for their own residence.
Other top-selling projects in June include The Botany at Dairy Farm, which sold 21 units at a median price of $1,979 psf, Tembusu Grand which sold 20 units at a median price of $2,542 psf, and Hillhaven which sold 18 units at a median price of $2,124 psf.
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According to URA records, the first six months of this year saw the lowest sales volume of private residential new homes since 2000. Based on data from OrangeTee, only 1,916 new private residential homes (excluding ECs) were sold in the first half of 2021, which is a 43.4% drop from the 3,383 units sold in the same period last year. This figure is also 54.6% lower than the 4,222 units sold in the first half of 2019.
Christine Sun, chief researcher and strategist at OrangeTee, remarks that the sales figures for the first half of this year were lower than those recorded during the Global Financial Crisis, when only 2,287 units were sold in the same period in 2008. During the lockdown in the first half of 2020, 3,862 units were still sold.
Sun explains that the record low sales this year were due to a decrease in the number of units launched. Only 1,938 units were released for sale in the first half of this year, according to her, the lowest number since the first half of 2004 when 2,080 units were launched. A lower number of new homes launched typically results in lower sales numbers as well. However, despite the relatively lackluster sales performance in the primary market in the first half of this year, the luxury segment saw some noteworthy transactions from projects such as Skywaters Residences, 32 Gilstead, and Watten House.
Sandrasegeran says that these high-profile sales, despite being moderate in pace, demonstrate the strong interest and investment in luxury properties within the Core Central Region.
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Looking ahead, sales numbers for developers in July are expected to pick up significantly due to the launch of major projects such as Sora, Kassia, and The Green Collection this month. According to Huttons Asia’s Lee, Sora, being a 99-year leasehold project on Yuan Ching Road in Jurong Lake District, sold 102 units during its launch over the July 5-6 weekend, representing about 23% of the 440-unit development. The average selling price was $2,160 psf.
Meanwhile, the 276-unit Kassia is set to launch on Saturday, July 20. The freehold development marks the final phase of the Flora Drive-Flora Road private residential enclave launched over three decades ago by Tripartite Developers – a joint venture between Hong Leong Holdings, City Developments and TID. Meanwhile, The Green Collection offers 20 strata-titled townhouses that overlook Tanjong Golf Course in Sentosa Cove.
The third quarter of this year will see the launch of many anticipated projects, including 8@BT, the 847-unit Emerald of Katong, Ariana East Residences, Meyer Blue, the 366-unit Union Square Residences, the 348-unit Norwood Grand, and the 916-unit The Chuan Park.
Located at Plantation Close, Novo Place EC boasts a prime location that offers residents convenient access to various parts of Singapore. This executive condominium is strategically situated near major roads and expressways, making it an ideal choice for potential homeowners. The development’s proximity to key thoroughfares such as the Pan Island Expressway (PIE) and the Kranji Expressway (KJE) allows for seamless travel across the island. Moreover, the Bukit Timah Expressway (BKE) provides direct connections to the northern and central regions of Singapore, making daily commutes a breeze for residents. With its excellent connectivity, Novo Place EC presents an attractive and convenient living option for individuals and families alike.
Lee remarks that as the number of launch-ready projects in the third quarter rises, sales volume in the primary market is expected to increase as well. However, OrangeTee’s Sun says that most developers will likely delay their project launches in order to avoid the upcoming lunar seventh month, known as the Hungry Ghost Festival. Thought to negatively affect buyer sentiment and lasting from August 4 to September 2, this period is typically considered to be inauspicious.
Knight Frank’s head of research, Leonard Tay, says that with more new project options becoming available, buyers may become more selective and measured. He adds that sales volume will likely remain low until interest rates start to fall. However, Tay expects new private home prices to increase by around 3% to 5% this year, as a result of elevated land costs committed 12 to 18 months ago, as well as high construction and development costs.
Knight Frank anticipates a total of 4,000 to 6,000 units being transacted in the private residential new sale market this year, substantially lower than the 7,000 to 9,000 units the consultancy projected at the beginning of this year.