New private home sales down 53% year-on-year in April

New private home sales down 53% year-on-year in April

condo launch
Prospective buyers at a condominium showroom. (File Photo: TODAY)

SINGAPORE: Sales of private homes by developers in Singapore fell about 53 per cent in April from a year ago, due in part to fewer new launches that month, according to data released by the Urban Redevelopment Authority (URA) on Tuesday (May 15).

The coming months are likely to bring better sales, however, as more and larger projects go on the market, analysts said.

Excluding executive condominiums (ECs), developers sold 729 units last month, compared with 1,567 units in the same month a year earlier and 716 units in March.

Including ECs, 1,325 units were sold in April, a drop from the 1,938 units in the same period a year ago.

“Contrary to what was expected earlier, only a few new projects were launched for sale in April, contributing to the low sales figures," said Mr Ong Teck Hui, national director of research and consultancy at JLL.

In all, 654 new private homes were launched during the month, down 40 per cent from the 1,616 units launched last April, noted JLL.

"We think the relatively small project sizes of the new launches in April 2018 - coupled with raised prices in the limited remaining unsold stock – could have resulted in the slower pace of sales growth in April," added Ms Tricia Song, head of research for Singapore at Colliers International.

That said, Ms Song said that she expects sales to improve over the coming months, as more and larger projects – including the 1,052-unit Affinity at Serangoon and 613-unit Garden Residences at Serangoon North -  hit the market.

JLL's Mr Ong added: "With much publicity on the keen demand from buyers, strong take-up at launches and robust pricing, market interest is being drummed up to the benefit of projects awaiting launches.

"The 3.9 per cent rise in the URA property price index for the first quarter of the year suggests the possibility of a good upside in prices which would encourage an unhurried stance towards launches in order to capitalise on the price increase."

Improved launch and sales figures can be expected in May, he added.

For the full year, estimated Ms Song from Colliers, new home sales could rise by 19 per cent year-on-year to 12,600 units (excluding ECs) from the 10,566 units in 2017.

Head of Research at Huttons Asia, Lee Sze Teck said: “If we were to look historically at the past 10 years, the average take-up for new projects was about 12,000 units a year. When we look back at 2014 to 2017, we’re actually selling way below that 12,000-unit mark. So there is a lot of pent-up demand in the market."

In the EC market, 596 units were sold last month. Of this, 585 units were snapped up at Rivercove Residences, which launched 628 units. The project is the only EC to be launched this year.

"The Government has cut down on the supply of land parcels that are to be designated for executive condominium developments. So the supply of EC projects has dwindled quite a lot to about just one project expected to be launched each year,” ZACD Group executive director Nicholas Mak said.

“Even though prices were very high, the take-up rate was also very strong – partly because of strong anticipation among potential homebuyers, and also the expectation that future EC projects could be even more expensive than the current one."

Additional reporting by Wendy Wong.

Source: Reuters/CNA/mz