Surprise rebound in new home sales last month

This article is more than 12 months old

With the reopening of Singapore's economy - and show-flats - on June 19, new home sales posted a surprise rebound last month as pent-up demand was unleashed.

Singapore is undergoing its worst recession in its history as an independent nation, but developers sold 998 non-landed private homes last month, up 105 per cent from May, when 487 private homes were transacted.

It was also the highest number of monthly sales recorded for June in seven years, and seems to indicate resilience in the property market despite the recession and the absence of major new launches.

New units booked last month saw an increase of 21.6 per cent from the 821 sold in June last year.

Not all buyers are affected by the recession. Workers in technology and the civil service - sectors that have not yet felt the pain of the pandemic-induced recession - as well as discounts and lower interest rates, underpinned demand, said Mr Nicholas Mak, ERA Realty's head of research and consultancy.

But buyers remain largely price-sensitive.

"We estimate 86 per cent of the total developer sales in June were (transacted) at the median price of $1,000 per square foot (psf) to $2,000 psf, similar to May," said Ms Tricia Song, head of research for Singapore at Colliers International.

She warned that the sales momentum may slow down as job losses and economic realities sink in.

Last month, 597 new private homes were launched for sale, down from 615 units in May and a decline of nearly 11 per cent from the 670 sold a year ago.

The figures released by the Urban Redevelopment Authority yesterday exclude executive condominium (EC) units, which are a public-private housing hybrid.

Mr Ong Teck Hui, senior director of research and consultancy at JLL, said: "OCR (outside central region) posted a 4.2 per cent increase over the first quarter, while RCR (rest of central region) and CCR (core central region) suffered declines of 10.7 per cent and 60.4 per cent respectively. The OCR sub-market has proven more resilient, due to more affordably priced projects and demand from HDB (Housing Board) upgraders."

The rebound might cause developers to launch more projects in the second half of the year, according to some analysts.

Developers may offer selective discounts to maintain sales momentum, said Mr Leonard Tay, head of research at Knight Frank Singapore.

More foreign buyers with deeper pockets returned to the Singapore market, said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.

According to URA Realis data yesterday, foreigners bought 49 non-landed homes last month, up from 33 units a year ago, while permanent residents purchased 120 units, up from 86 units a year ago.

Ms Sun said: "Many foreigners bought properties last month as macroeconomic uncertainties drove more overseas investors to seek shelter in safe-haven assets here."