PENT-up demand continues to drive new private home sales in August - Business Times
PENT-up demand from local property buyers continues to drive new private home sales with 1,227 units sold in Singapore in August, an 11-month high with confident buyers pushing prices upwards amid worsening economic conditions and rising unemployment.
The high number of transactions surprised some because it was also the Hungry Ghost month, but it got an extra lift from Forett At Bukit Timah, a freehold development that was launched on Aug 8 - the first private residential project launch since the "circuit breaker" ended on June 1. A total of 212 units have been sold as of Aug 31.
According to URA Realis data, August's new home sales of 1,227 (excluding executive condominiums, or ECs) is the highest since September's 2019's 1,270, said Christine Sun, OrangeTee & Tie, head of research and consultancy. It is also up 13.6 per cent year-on-year and 9.3 per cent over July's 1,080. Including ECs, 1,276 units were sold in August.
The high number of transactions surprised some because it was also the Hungry Ghost month, but it got an extra lift from Forett At Bukit Timah, a freehold development that was launched on Aug 8 - the first private residential project launch since the "circuit breaker" ended on June 1. A total of 212 units have been sold as of Aug 31.
According to URA Realis data, August's new home sales of 1,227 (excluding executive condominiums, or ECs) is the highest since September's 2019's 1,270, said Christine Sun, OrangeTee & Tie, head of research and consultancy. It is also up 13.6 per cent year-on-year and 9.3 per cent over July's 1,080. Including ECs, 1,276 units were sold in August.
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"Backed by pent-up demand, we had anticipated that August's new home sales could match the 1,080 units sold in July, or perhaps just moderate slightly given that market activity is typically slower during the Hungry Ghost month (which started on Aug 19)," said Wong Siew Ying, PropNex head of research and content. "Hence, the 1,227 caveats posted in August has surprised on the upside" even as thousands lost their jobs due to Covid.
Singapore's gross domestic product is expected to shrink 6 per cent this year, according to private sector economists polled by the Monetary Authority of Singapore. Ministry of Manpower figures showed overall retrenchments - including citizens and non-citizens - of 6,700 in the second quarter and 3,220 in the first quarter, which was higher than the peak of 5,510 during the 2003 Sars outbreak, but below the 2009 global financial crisis high of 12,760.
Singapore's gross domestic product is expected to shrink 6 per cent this year, according to private sector economists polled by the Monetary Authority of Singapore. Ministry of Manpower figures showed overall retrenchments - including citizens and non-citizens - of 6,700 in the second quarter and 3,220 in the first quarter, which was higher than the peak of 5,510 during the 2003 Sars outbreak, but below the 2009 global financial crisis high of 12,760.
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"Last month's new home sales defied gravity amid the pandemic, rising unemployment rate, Hungry Ghost month and cooling measures," said Ms Sun. New home sales seem to be driven by domestic demand where Singaporeans formed the bulk of purchasers (84.7 per cent) for the 1,223 new non-landed private homes sold last month, she noted.
For many Singaporeans, residential properties may still be a "safer bet" especially for investors who are looking for stable returns during times of economic uncertainty. Properties in Singapore generally have a good track record of yielding attractive capital appreciation over the past 30 years, especially for new projects that are well-located, possess good product attributes and built by renown developers. The low-interest rates have also provided some support for the property market as the borrowing cost or mortgages are now more affordable for new borrowers.
Evan Chung, the head of Knight Frank's property network, said the profile of buyers fit that of mostly "needs-based" purchasers. These include buyers who sold their properties and are now in need of a new home and those getting married in the coming months, or whose weddings have been pushed back due to the pandemic.
For many Singaporeans, residential properties may still be a "safer bet" especially for investors who are looking for stable returns during times of economic uncertainty. Properties in Singapore generally have a good track record of yielding attractive capital appreciation over the past 30 years, especially for new projects that are well-located, possess good product attributes and built by renown developers. The low-interest rates have also provided some support for the property market as the borrowing cost or mortgages are now more affordable for new borrowers.
Evan Chung, the head of Knight Frank's property network, said the profile of buyers fit that of mostly "needs-based" purchasers. These include buyers who sold their properties and are now in need of a new home and those getting married in the coming months, or whose weddings have been pushed back due to the pandemic.
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Propping up the market again are HDB upgraders who buy in the more affordable city fringe and mass-market segments. Drilling further into the data, buyers in August went for the more costly homes in the Rest of Central Region (RCR) pushing the share to 49.2 per cent or 604 units.
The OCR (Outside Central Region) accounted for 40.5 per cent or 497 new homes sales (excluding ECs). The expensive Core Central Region made up the remaining 10.3 per cent or 126 homes sold.
RCR's volume of 49.2 per cent is the highest since September 2019 when RCR formed 58.7 per cent of the total new home sales (excluding ECs).
Buyers are also willing to pay more, as seen by the higher median prices on a per sq foot (psf) basis in August over that of July. The estimated median unit prices on a psf in August have all increased across the top nine projects when compared with July's median unit price, with the highest gain of 4.6 per cent at the Daintree Residence.
The OCR (Outside Central Region) accounted for 40.5 per cent or 497 new homes sales (excluding ECs). The expensive Core Central Region made up the remaining 10.3 per cent or 126 homes sold.
RCR's volume of 49.2 per cent is the highest since September 2019 when RCR formed 58.7 per cent of the total new home sales (excluding ECs).
Buyers are also willing to pay more, as seen by the higher median prices on a per sq foot (psf) basis in August over that of July. The estimated median unit prices on a psf in August have all increased across the top nine projects when compared with July's median unit price, with the highest gain of 4.6 per cent at the Daintree Residence.
"Lots of foreign investments and opportunities are heading towards Singapore even before we open our doors to foreigners due to Covid restrictions." - Kiwi Lim (Huttons Asia)
"Most best-seller projects have seen a gradual upward trend in pricing this year," said Lam Chern Woon, Edmund Tie senior director, research and consulting. Added PropNex's Ms Wong: "Apart from Forett At Bukit Timah, which was launched in August, most of the top 10 best-selling projects in August had higher median transacted psf price compared to their respective median launch price."
Whistler Grand sold 51 units in August at a median price of S$1,558 psf, up 14.6 per cent from its launch price of S$1,360 psf. It was launched in November 2018. But two of the top 10 - The Garden Residences and The Woodleigh Residences - saw declines of 5.3 per cent and 5.6 per cent respectively in their median psf. Against July's psf price, The Garden Residences and The Woodleigh Residences managed a small uptick - up 0.3 per cent and one per cent respectively.
Huttons Asia's real estate adviser Kiwi Lim believe the opening of Singapore for MICE events will bring more foreign buyers into the already hot local property market as the current property sales are driven purely by local buyers due to pent-up demand and lesser supply of new launch condos in the market.
Whistler Grand sold 51 units in August at a median price of S$1,558 psf, up 14.6 per cent from its launch price of S$1,360 psf. It was launched in November 2018. But two of the top 10 - The Garden Residences and The Woodleigh Residences - saw declines of 5.3 per cent and 5.6 per cent respectively in their median psf. Against July's psf price, The Garden Residences and The Woodleigh Residences managed a small uptick - up 0.3 per cent and one per cent respectively.
Huttons Asia's real estate adviser Kiwi Lim believe the opening of Singapore for MICE events will bring more foreign buyers into the already hot local property market as the current property sales are driven purely by local buyers due to pent-up demand and lesser supply of new launch condos in the market.
From Business Times news article on 10 September 2020
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