New home sales soared 75.5% MoM in May: URA
This appears to be largely driven by locals and investors.
Singapore’s property market sprung back to life as new home sales, excluding executive condominiums (EC), spiked 75.5% MoM to 486 units in May from 277 units in April, according to the Urban Redevelopment Authority (URA). Including EC, sales jumped 73.7% MoM from 293 units to 509 units over the same period.
The Outside Central Region (OCR) had the most units sold with 256 units over the same period, whilst the Rest of Central Region (RCR) and Core Central Region (CCR) had 189 and 41 transactions, respectively.
Consequently, sales in the RCR and OCR, developer sales more than doubled in both regions by 145.5% MoM and 161.2% MoM respectively. However, sales in the CCR dropped by 59.8% MoM.
The increase in sales comprised mainly suburban residential projects, with Treasure At Tampines (OCR), Parc Clematis (OCR), The Florence Residences (OCR), and Parc Esta (RCR), recording sales of 56, 55, 54, and 45 units respectively. A unit at KOPAR at Newton was the most expensive unit transacted in May, with a price tag of $7.8m or $2,385 psf.
Treasure At Tampines, The Florence Residences, and Jadescape - recorded a slight increase in their median price compared to when they were launched. Meanwhile, median prices at Parc Esta and Parc Clematis saw a marginal dip in May.
New launches in the upcoming months include Forett @ Bukit Timah by Qing Jian Realty, as well as Penrose by City Developments Limited and Hong Leong Holdings' Intrepid Investments.
OrangeTee & Tie's head of research & consultancy Christine Sun notes that May’s sales appear to be largely driven by locals and investors. “There seem to be more investors entering the market as sales of smaller or lower-priced units soared last month. These private homes tend to be more popular among investors given their affordability and attractive investment yield,” she added.
According to URA realis data, the proportion of non-landed new homes bought by Singaporeans rose to 84.8% in May from 84.1% in April. By absolute numbers, the number of non-landed homes bought by Singaporeans rose 81.1% to 402 units over the same period.
Foreigner purchases had similarly strengthened in May as the number of non-landed new homes bought by permanent (PR) and non-permanent residents (non-PRs) surged 71.4% from 42 units in April to 72 units in May.
The number of smaller units excluding EC below 800 sqft also advanced 70% to 319 units in May from 188 units in April, whilst the proportion of private home sales excluding EC below $1m increased from 23.6% in April to 28.7% in May.
However, on a yearly basis, the sales volume was 48.9% YoY lower than the 952 units sold in May 2019. Notably, the 486 units sold in May is the lowest monthly tally for the month of May since 453 new homes were transacted in May 2008.
Taken together, developers have sold 2,912 new homes in the first five months of 2020, representing a 17% YoY decline from 3,527 units sold in the corresponding period of 2019.
Chief Executive Officer of PropNex Realty Ismail Gafoor expects that developers could still sell about 7,000 to 7,500 new units (excluding EC) in 2020 should there be no second wave of infection and widespread job losses.
According to URA Realis data, 155 new homes excluding ECs have already been sold in the first seven days of June, which is more than half the 277 units inked in April. Lee Sze Teck, Director (Research), Huttons Asia notes that as the country moves into the next phase of opening up, property sales may continue to be a hybrid of physical and online viewing of show galleries.
“We may see a recovery back to the pre-circuit breaker sales of 700+ units a month or more as the traditional buyers return to the show galleries,” Lee added.