New Home Sales Surge 82% in July

Pasir Ris 8 Central Greenway

 

Property Developer sold 1,589 new condo in July this year, an increase of 82.2 percent over the previous month’s sales of 872 units.

The Urban Redevelopment Authority (URA) published these statistics, which exclude executive condominium (EC) units, on Monday, based on a poll of licensed housing developers.

According to URA statistics, the suburbs or Outside Central Region (OCR) accounted for the lion’s share of sales volume last month, accounting for 1,012 units or almost two-thirds of the entire volume.

Huttons Asia CEO Mark Yip said that seven of the top ten best-selling projects in July were in the OCR. Pasir Ris 8 (PR8), which debuted on July 24 and 25, witnessed “overwhelming demand” and sold more than 85% of its units, despite being the year’s first OCR launch, he said.

Other projects also saw an increase in new sales in late July, before the developers executed their intended price increases, according to an earlier article by The Business Times (BT).

Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, saw purchasers returning to the private residential market “in droves,” with some hurrying to purchase for fear of being priced out.

According to PropNex Realty CEO Ismail Gafoor, previous aggressive land bids may have encouraged buyers to anticipate future launch costs to increase even more. “A significant number of investors and purchasers who had been waiting for the appropriate moment chose to join the market in July in expectation of future price increases,” Mr Gafoor said.

According to Mr Yip of Huttons, 445 apartments were sold from July 25 to July 31, considerably more than the 404 units traded in the first half of the month.

According to Huttons Research, new sales in July more than quadrupled from June in a sample of ten developments, including Sengkang Grand Residences, Normanton Park, Midwood, and Ki Residences at Brookvale.

 

Spillover Effect from the Success of Pasir Ris 8

“Following the successful launch of PR8, there was spillover demand to other integrated projects and projects even beyond the area,” Mr Yip said.

According to ERA’s director of research and consulting, Nicholas Mak, PR8’s repeated price increases have led some prospective purchasers to look for alternative projects. “Some customers who chose not to purchase PR8 apartments reported that property brokers tried to direct them to alternative developments like as Normanton Park and Sengkang Grand Residences,” Mr Mak said.

The rise in the daily average number of units transacted at other development after PR8’s price adjustments suggested that some homebuyers remain price sensitive and may be ready to swap one project for another in a different area, particularly if they are investors, he said.

Meanwhile, according to URA statistics, the city periphery or Rest of Central Region (RCR) sold for 438 units, or about 27.6 percent of total volume excluding ECs, in July, while the Core Central Region (CCR) had 139 units sold, or just 8.7 percent.

Last month’s new sales were 46.7% greater year on year than in July 2020.

Ms Sun said that the country’s recent tighter measures in response to the epidemic did not seem to have substantially dampened market confidence.

“The effect of the restrictions was more minor this time, compared to prior rounds,” she said. “Developers and sales agents learned to ‘get over the bump’ by utilizing technology to complete transactions and social networking platforms to remain in contact with consumers.”

In July, Singaporeans accounted for 86.3 percent of all purchases, while permanent residents and foreigners contributed for 9.4 percent and 4.2 percent, respectively.

 

High Demand from HDB Upgraders

Mr Yip highlighted that the higher percentage of Singaporean purchasers, compared to June’s 81.8 percent, was likely related to the introduction of PR8, since demand for new private houses in the OCR would mostly come from people upgrading from their Housing and Development Board (HDB) apartments.

“More than 6,000 HDB apartments built between 2014 and 2016 in Pasir Ris and Tampines have fulfilled the five-year minimum occupancy term and are therefore eligible for upgrading,” he added.

Including ECs, which are a mix of public and private housing, developers found buyers for 1,744 units last month, an increase of roughly 81.3 percent over June’s 962 houses.

In terms of new product introductions, 1,104 units were introduced in July, representing a 35.5 percent rise over the previous month. With 879 units, the OCR accounted for the majority of the launch volume.

 

“Ghost Month” set to defy Sales Momentum

Despite the fact that August is the lunar seventh month, developers are likely to go forward with their releases in order to capitalize on the favorable momentum, according to Mr Yip.

This month, preview sales will begin at UOL Group’s The Watergardens in Canberra and Low Keng Huat’s Klimt Cairnhill. UOL has said that it is adhering to its suggested pricing for The Watergardens, which begin at S$1,380 per square foot.

“August is expected to be another month in which developer sales exceed 1,000 units. This will further decrease down the unsold inventory in the market to even lower levels, setting the stage for sustained price growth in the months ahead,” Mr Yip added. OrangeTee & Tie’s Ms Sun said that the current home supply, particularly in the suburban region, will not be able to meet the “swelling demand” from Singaporeans such as HDB upgraders.