Residential unit sales up 0.1% in Q1 as luxury home transactions drive gains

Market launches in the core central region hit a five-year high at 363 units.

Developers ramped up the pace of their launches in Singapore in the first quarter of 2019, especially after the Chinese New Year. According to Savills Research, a total of 2,989 uncompleted private residential units were rolled out for sale, up 80.4% QoQ. Amongst these, almost half—or 1,459 units—were from 13 new projects.

Core Central Region (CCR) stood out as the high-end market segment and saw 363 new units launched in Q1 2019. The headline figure is nearly double the 182 in the preceding quarter and the highest quarterly number since Q4 2014. Five of the 13 new projects are located in the CCR, including 35 Gilstead, Boulevard 88, Fourth Avenue Residences, Fyve Derbyshire and RV Altitude.

The volume of units launched in the mass market segment or Outside Central Region (OCR) also increased sharply by 202.1% QoQ to 1,689 units, mainly from two large-scale new launches—The Florence Residences and Treasure At Tampines—as well as some new releases in projects that were launched last year, such as Riverfront Residences, Affinity At Serangoon and Parc Botannia.

As a result, developers moved 192 units in CCR and 1,009 units in OCR, up 115.7% QoQ and 41.5% QoQ, respectively. The picture, however, was markedly different for the Rest of Central Region (RCR) as the number of new units sold fell 38.4% QoQ to 637 new homes.

Overall, 1,838 private residential units were sold in the primary market, inching up 0.1% from a quarter ago.

Island-wide, the top seller in the primary market was Treasure At Tampines, a 2,203- unit development by Sim Lian Group on the former Tampines Court site. Savills Singapore CEO Marcus Loo added, “From the time this project launched in March, 289 units were sold at an average price of about $1,3371 psf.”

Other top-selling projects in the first quarter included The Tre Ver in Potong Pasir developed by a 50-50 joint venture between UOL group and United Industrial Corporation, which sold 193 units at an average price of $1,595 psf, and Oxley Holdings’ Affinity At Serangoon, which moved 175 units with an average price of $1,491 psf.

However, Loo noted that although sales at a number pre-launched projects were bolstered by higher commissions and news of the upcoming first phase development of the Cross Island Line in Q1, take-up rates for the quarter’s newly launched projects in both the RCR and OCR slowed. The initial launch take-up rates for such projects in the RCR averaged 13.5% in Q1 2019, compared with 27.4% in the period 6 July to 31 December (after cooling measures) 2018 and 56.6% during the period from 1 January to 5 July 2018.

Similarly, the rate in the OCR was only 7.6% in Q1 2019, down from 17.4% for the 6 July to 31 December 2018 period and 40.1% from 1 January to 5 July 2018. “Other than the negative effects arising from the government cooling measures that took effect on 6 July 2018, the high launching prices in recent projects due to their costly land prices as well as keen competition from projects in the vicinity may have deterred potential buyers’ purchases,” Loo commented.

Luxury segment stays strong
On the other hand, the average initial launch take-up rate for new sales in the CCR was 13.2% in Q1 2019, 4 ppt higher than the 9.1% recorded in the period from 6 July to 31 December last year, and even 0.2 of a ppt higher than the period before the cooling measures. Since 2018, there have been very limited new launches in the luxury market segment, the executive noted.

Loo added, “Pent-up demand from the high net wealth class for prime-quality units, such as those at Boulevard 88, is likely to have been the reason for the uptick in new sale take-up rates in Q1 2019. Concurrently, prices for such properties are more resilient compared with those in the other market segments and more inelastic to their buyers, such as high net worth individuals.”

Also read: Luxury home sales take off in Q1

For secondary sales, Q1 2019 stayed as a slow quarter. The number of private homes sold in the reviewed quarter shrank by 5.9% QoQ to 1,905 units for the whole island.

By locality, the RCR recorded 507 units sold with an 11.8% quarterly decline, whilst the OCR saw 965 units change hands, falling by 7.9% QoQ. In contrast, the transaction volume in the CCR rose by 8.0% QoQ to 433 units.

“Together with the healthy performance in the new sales market, we believe that buying interest for high-end residential properties, especially luxury ones, has gradually returned on the back of attractive prices compared with those in other cities in the region,” Loo commented.