July’s new home sales soar 55% to 16-month high on panic buying

July’s new home sales soar 55% to 16-month high on panic buying

Private home sales by developers in Singapore surged 55 per cent in July from a year earlier to a 16-month high, boosted by panic buyers who rushed to snap up properties the night before new cooling measures took effect early last month.

Excluding executive condominiums (ECs), developers sold 1,724 units in July, compared with 1,112 units in the same month a year earlier, Urban Redevelopment Authority data showed.

July’s sales were the highest since March 2017 when 1,780 units were sold. Compared to the previous month, transactions were more than double June’s 654 units.

Including ECs, 1,776 units were sold in July, a large jump from the 706 sold the previous month, but a drop from the 2,092 homes sold in July last year.

PANIC BUYING

The July jump came after the Government introduced additional property cooling measures in the first week of the month, including raising Additional Buyer’s Stamp Duty rates and tightening loan-to-value limits on residential property purchases.

Showrooms extended their opening hours and several developers brought forward their launches, as scores of potential buyers flooded showflats on Jul 5 in the hopes of locking in a last-minute buy before the new rules kicked in the following day.

Developers launched a 2,239 new units in July – the highest since March 2013 when 3,489 new private homes were placed on the market, noted Ms Tricia Song, head of research for Singapore, Colliers International.

PropNex Realty CEO Ismail Gafoor said that July’s data was “expected due to buyers and property investors rushing to purchase their units before the implementation of the recent cooling measures”.

“As reported, about 1,000 units were sold at top performing projects Riverfront Residences, Park Colonial and Stirling Residences in just one night,” said Mr Ismail.

MAINTAINING MARKET SENTIMENT

In the weeks since the new housing curbs were implemented, however, market sentiment still seems to be relatively healthy, analysts said.

“What is notable is that post-cooling measures, the sales momentum carried through at these three projects and other developments as well, as reflected by the total units sold (1,724 units) in July,” said Mr Ismail.

“This can be attributed to the developers adjusting their prices, enticing buyers to commit to their purchase,” he added.

Colliers’ Ms Song also pointed out that buyers purchased an additional 118, 119 and 139 units at Riverfront Residences, Park Colonial and Stirling Residences respectively after the cooling measures took effect.

“We believe this reflected genuine demand, undeterred by the higher additional buyer’s stamp duty and lowered loan-to-value limits,” Ms Song said.

In all, more than 38.4 per cent of the URA caveats lodged in July were done post-measures, noted OrangeTee.

“The high percentage of caveats lodged after the implementation of the cooling measures indicate that sales are still relatively quite healthy, driven mostly by first-timers who are less affected by the cooling measures and found the current launch prices quite attractive,” said Ms Christine Sun, head of research and consultancy at OrangeTee.

Moving forward, sales are expected to moderate from the high-base of July’s sales.

“Moderated monthly sales figures are likely to be seen for the rest of the year, taking into account the more cautious mood of both buyers and sellers,” said JLL national director of research and consultancy Ong Teck Hui.

However, Mr Ong added, realistically priced projects will likely achieve a better take-up.

Source: Channel NewsAsia – 15 Aug 2018

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