SINGAPORE: Private developers sold 1,256 new homes excluding executive condominiums in August, surprising analysts by achieving the highest sales in 11 months amid the COVID-19 pandemic.
Last month's private home sales volume is the highest since September 2019, when 1,270 units were sold.
Sales also rose 16.3 per cent compared to a month ago, extending the growth in volume into a fourth straight month, according to data released by the Urban Redevelopment Authority (URA) on Tuesday (Sep 15).
Including executive condominiums, sales increased by 14.4 per cent month-on-month to reach 1,307 units.
Year-on-year, the number of units sold was also up 11.9 per cent when compared with 1,123 units sold in August 2019.
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"COCKTAIL OF CHALLENGES"
August's sales figures bucked the trend and were surprising given challenges facing the economy and labour market, said analysts.
"August’s new home sales have surprised on the upside, particularly in the face of a cocktail of challenges – the pandemic, recession, weak hiring prospects – and the Hungry Ghost Month as well," said Ms Wong Siew Ying, head of research and content at PropNex.
The sales volume "bucked the trend", as market activity tends to slow during the Hungry Ghost Festival, said Ms Christine Sun, head of research and consultancy at OrangeTee.
"New home sales rose 'higher and quicker' than expected after the circuit breaker period, which upended sales in April and May with the showflat closures," she added.
This could be attributed to more buyers seeking shelter in safe-haven assets amid rising economic uncertainty and volatile equity markets, said Ms Sun, adding that low interest rates also made mortgages more affordable.
Sales were spurred by "pent-up demand" following Singapore's circuit breaker and Phase 1 reopening, said PropNex CEO Ismail Gafoor, with buyers seeing property as a more stable investment than financial markets.
But new home sales may start to moderate slightly in the coming months as this pent-up demand is absorbed into the market, he said.
Describing "strong domestic demand" in the market, Ms Sun noted that Singaporeans accounted for 84.4 per cent of transactions – or 1,047 – in August, and this was the highest number of Singaporean purchases since July 2018.
However, transactions by foreign buyers also rose 74 per cent in August, said Mr Gafoor, reaching the second highest monthly sales to foreigners this year.
"With the gradual reopening of the economy and the setting up of fast lanes for essential travel, we would anticipate a slow and measured recovery in foreign demand for private homes in Singapore," he said.
Another analyst said "rapid sales" in August were a result of buyers only being able to visit showflats by appointment, in line with COVID-19 measures.
This resulted in more focused sales negotiations, with buyers "decisively" buying into popular projects, said property analyst Ong Kah Seng.
"This pent-up exuberance is well within expectations, as buyers continue to opportunistically purchase attractively priced properties from developers who adopt competitive sales strategies in recession," said Mr Ong.
However, Mr Ong added that recent sales at high prices "are increasingly felt to be 'not in sync' with the economic fundamentals and severe recession".
This would be a cause for concern if buyers "unknowingly overstretched" their means and mortgage servicing ability when purchasing property, said Mr Ong.
On the surface, August's home sales may appear to be in stark contrast with the gloomy economic and hiring outlook, said PropNex's Ms Wong.
"But we believe there remains a segment of buyers who have the finances and have been looking to enter the market. These buyers may opt to buy now knowing that developers are pricing units more sensitively and that the low interest rates are supportive of home financing," she added.
August saw the launch of 1,582 private residential units for sale.
Analysts highlighted Forrett at Bukit Timah as a star performer, with 213 units sold out of 300 launched last month.
Treasure at Tampines, with 109 units sold, and Parc Clematis, with 90 units sold, were also among the best-selling properties last month.