Singapore new home sales rise in July, up for third straight month

Singapore new home sales rise in July, up for third straight month

Private developers sold 1,080 new homes excluding executive condominiums (ECs) in July, a third straight month of growth.

However, compared to July last year, private home sales volume fell 8.4 per cent from 1,179 units, according to data from the Urban Redevelopment Authority on Monday (Aug 17).

On a month-on-month basis, July’s sales marked an 8.2 per cent jump from the 998 units transacted in June, which was itself an increase from the preceding month.

One analyst attributed the demand to investors looking to park their money in safe-haven assets.

“Investors continue to throng the property market … amid the growing economic uncertainties and turbulent equity markets,” said Ms Christine Sun, head of research and consultancy at OrangeTee.

“Some buyers may be capitalising on the falling interest rates to lock-in lower mortgage payments for future years.”

While the economic impact of COVID-19 has been felt by large swathes of people, for some, the repercussions have not been as pronounced.

“Some sectors – such as financial services and tech – have held up better than others amid the COVID-19 pandemic … those who feel more secure about their job prospects or have built up substantial savings … may see this as an opportune time to enter the market,” said Ms Wong Siew Ying, head of research and content at Propnex.

While the 1,080 units (excluding ECs) sold in July is the highest monthly total this year, one analyst is exercising caution in his outlook, given the possibility of recurring waves of the COVID-19 pandemic and Singapore’s economic performance.
READ: Singapore narrows 2020 GDP forecast range as economy sees record quarterly slump in Q2

For the second quarter, the Singapore economy contracted by 13.2 per cent on a year-on-year basis, a sharp fall from the 0.3 per cent contraction in the previous quarter.

“Should Singapore’s GDP growth be in such negative territory in 2020, the inevitable job losses and business closures will take its toll on the private residential market despite its current characteristic resilience,” said Leonard Tay, head of research at Knight Frank Singapore.

PRICIER HOMES IN DEMAND

Meanwhile sales of pricier homes, which are typically bought by investors and higher-income Singaporeans, hit a seven-year high, based on analysis by Ms Sun of OrangeTee.

“150 non-landed homes (excluding ECs) were sold above S$2 million last month, with the last highest number of 181 transactions recorded in December 2013,” she said, adding that two private homes were sold for more than S$10 million, one of which was located in the Rest of Central Region.

“The increasing demand for such luxurious homes attests to the resilience and attractiveness of residential properties in Singapore.”

Source: CNA – 17 Aug 2020

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