Dreary Christmas for developers as new private home sales plunge 50% in December

Dreary Christmas for developers as new private home sales plunge 50% in December

Developers did not have a very merry Christmas last month, after sales of new private homes plunged 50 per cent in December from the previous month.

Excluding executive condominiums (ECs), developers sold 602 units last month, compared with 1,201 units in November, data released on Tuesday (Jan 15) by the Urban Redevelopment Authority (URA) showed.

Including ECs, 605 private homes were sold, down from 1,205 units the previous month.

December is a typically slow month for the housing market, with potential buyers away for holidays.

On a year-on-year basis, however, December’s new private home sales was 40 per cent higher than the previous year’s 431 units sold.

A total of 101 new homes were launched by developers last month, with no new EC units launched.

The top-selling private residential project was Parc Esta at Sims Avenue with 160 units sold, followed by Whistler Grand at West Coast Vale with 128 units sold.

“Sales demand is relatively healthy considering no new projects were launched last month and the traditional lull period for buying activities during the year-end holidays,” said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.

She added that the developer sales tally for the whole of 2018 is expected to reach about 9,264 units (excluding ECs), which is within their earlier projection of between 9,000 and 10,000 units.

The sales volume for 2018 is lower than that of 2017 but higher than 2014, 2015 and 2016, she noted.

“While the macro-economic conditions remain uncertain, Singapore’s economic growth and job market are expected to remain firm this year,” Ms Sun said.

“The ongoing sales momentum at several new projects may indicate that the property market could be reaching equilibrium soon as prices are stabilising and more buyers are streaming back.”

UNDERLYING DEMAND

Mr Nicholas Mak, executive director of ZACD Group, said that new private home sales for last year were “relatively healthy” despite the introduction of the July cooling measures, which reflects an “underlying demand” for reasonably-priced and well-located projects.

He expects a “significant” number of new private homes to be launched this year, including Treasures at Tampines (2,203 units) and The Florence Residence (1,410 units).

He cautioned, however, that home-buying demand will continue to be moderated by the market cooling measures, rising interest rates, global economic uncertainty and US-China trade tensions.

“Residential developers’ sales volume in 2019 could continue to moderate to between 7,500 and 9,000 for the whole year as there is still cautious optimism and healthy underlying demand in the market,” he said.

Ms Tricia Song, head of research for Colliers International in Singapore said she expect sales to be supply-led this year.

“In 2019, we estimate that 55 to 60 projects that make up over 17,000 units could be launched. However, some of these may spill over to 2020 depending on market conditions,” she said.

“In the near-term, we believe demand side factors such as household income growth, job security, household formations should continue to support the private residential market. For 2019, we forecast that developers could potentially sell 9,500-10,000 new homes given the steady pipeline of upcoming projects,” she added.

Source: Channel NewsAsia – 15 Jan 2019

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