ANALYSTS expect new private home sales to remain robust for the rest of the year on the back of major upcoming launches.
Three launches are in the pipeline for November, namely CanningHill Piers, The Commodore and Cairnhill 16. With an expected booking date of Nov 20, CanningHill Piers at River Valley Road will add an estimated 696 new units to the market, according to ERA’s head of research and consultancy Nicholas Mak.
Another three projects will launch in December, noted Lee Sze Teck, senior research director at Huttons Asia. This includes Perfect Ten, Mori and Zyanya.
Analysts predict that the market will end on an eight-year high of around 12,000 to 13,000 new sales. The previous high was 14,948 units in 2013.
So far, the first ten months of 2021 have surpassed full-year sales in 2018, 2019 and 2020 with 10,918 units, based on October sales figures released by the Urban Redevelopment Authority (URA) on Monday (Nov 15).
According to URA, developers in Singapore sold 909 new private homes last month, up 9 per cent from September’s 834 units. This came despite the sustained viewing restrictions and visitor caps implemented at show galleries, noted Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics.
Including ECs, sales eased 19.4 per cent to 1,045 from September’s 1,296. Despite the fall, the figure is the highest for October in five years, Sun noted. The number of unsold ECs is also “running very low” at 221 units, added Lee.
Compared with the year-ago period, new sales with and without ECs are 50.6 per cent and 39 per cent higher respectively.
Monday’s figures were slightly higher compared to consultants’ flash estimates published by The Business Times on Friday (Nov 12).
Similar to September, most of October’s sales excluding ECs were in the Outside of Central Region (ORC). The segment sold 347 units or 38.2 per cent of the month’s sales.
Meanwhile the Core Central Region (CCR) and Rest of Central Region (RCR) each sold 281 homes or 30.9 per cent of the month’s total.
The CCR typically holds the smallest share among the three segments, with less than 200 units sold each month, noted Mak. However, October’s CCR figures were likely boosted by the official launch of Jervois Mansion, which sold 99 units at a median price of S$2,553 per square foot (psf) during the month.
Jervois Mansion was also the best-selling project in October.
Leonard Tay, head of research at Knight Frank, added that October’s CCR figures were 319.4 per cent higher than that of the same period last year.
Tay said: “The private residential price index for the RCR has grown by 9 per cent from January to September 2021, while the index for the CCR rose a mere 1.1 per cent during the same period. As such, local as well as foreign buyers who had previously targetted homes in the RCR might now be tempted to shift their focus to some good value opportunities in the CCR in the coming months.”
Another significant deal in the CCR is a penthouse at Les Maisons Nassim, which sold for S$75 million or $6,210 psf, noted Lee.
He said: “This is possibly the priciest penthouse by quantum and psf in recent years.”
Lee also noted that the increased number of CCR purchases pulled up the proportion of houses priced at S$2 million and above to 39 per cent of October’s sales.
“The average price paid for a unit in October was S$2.25 million,” he said.
Mak added: “More buyers could shift their attention to CCR projects as available units in the suburbs gradually decrease.”
Sun noted that the number of launched but unsold units excluding ECs dipped from 7,233 units in January to 4,725 units in October.
She said: “The supply of new homes is expected to drop further next year. There will be fewer project launches as successful enbloc deals dipped significantly over the past two years.”
Tay also said that there will come a point, likely in the next year, when rising prices will meet with some buyer resistance.
He said: “When taken together with the expected increase in domestic borrowing rates in the second half of 2022, the current window characterised by brisk strong sales might not last beyond the next 12 months. Therefore, it is likely that developers with projects on hand will use the next six to nine months to launch and reduce inventory before the post-pandemic recovery fervour tapers off with the anticipated higher mortgage rates.”
Meanwhile, Lee noted that out of the top five groups of foregin buyers (China, Malaysia, India, Indonesia and the US), only Malaysia and the US currently have vaccinated travel lanes (VTL) with Singapore.
“If there should be VTLs set up for more Asean (Association of Southeast Asian Nations) countries, this will further boost transactions in the property market in 2022.”