Developers Sell 228 New Private Homes June And New Private Home Sales Reach Record Low 1H2024
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According to the latest statistics on developer sales released by URA on July 15, property developers sold a total of 228 new private residential homes (excluding executive condos) in June. This represents an increase of 2.2% compared to the 223 units sold in May.
In the second quarter of this year, a total of 752 new private residential units were transacted, taking into account the sales in June. However, the sales figure for last month was 18% lower compared to the 278 units sold in the same period last year. Lee Sze Teck, senior director of data analytics at Huttons Asia, notes that this could be due to buyers becoming more selective and cautious in light of the current economic climate.
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The Lakegarden Residences was the best-selling private residential project in June, with 23 units sold at a median price of $2,119 psf. Mohan Sandrasegeran, head of research and data analytics at SRI, believes that the recent launch of Sora over the July 5-6 weekend may have contributed to the strong sales at The Lakegarden Residences, which was launched in August last year.
Marcus Chu, CEO of ERA Singapore, adds that from January to May this year, The Lakegarden Residences only sold 22 units as most buyers waited for the preview of Sora before making their purchase. He also suggests that the announcement of a major development in the Jurong Lake District by a consortium of five major developers could have boosted confidence among buyers and driven demand for new homes in the area.
Chu also points out that 19 out of the 23 units sold at The Lakegarden Residences were 75 sq m and larger, suggesting a strong demand for larger units from buyers, possibly HDB upgraders, looking for homes for their own stay.
Other top-selling projects in June include The Botany at Dairy Farm, which sold 21 units at a median price of $1,979 psf, Tembusu Grand, which transacted 20 units at a median price of $2,542 psf, and Hillhaven, which sold 18 units at a median price of $2,124 psf.
However, the first six months of this year saw the lowest half-year sales volume in the private residential new homes market since 2000, when URA records were available. Based on data compiled by OrangeTee, a total of 1,916 new private residential homes (excluding ECs) were sold in the first half of this year. This is a 43.4% drop compared to the 3,383 units sold in the same period last year, and a 54.6% decline compared to the 4,222 units sold in the first half of 2022.
According to Christine Sun, chief researcher and strategist at OrangeTee, the sales volume for the first half of this year is even lower than that recorded during the Global Financial Crisis, when 2,287 units were sold in the first half of 2008. Even during the Covid-19 lockdown in the first half of 2020, developers were still able to transact 3,862 units.
Sun explains that the low sales figure for this period is due to the limited number of new units launched for sale. Only an estimated 1,938 units were launched in the first half of this year, the lowest since 2004 when 2,080 units were launched. She notes that when fewer new homes are launched, sales volume typically decreases as well.
However, despite the slow sales performance in the primary market in the first half of this year, the luxury segment recorded impressive transactions from projects such as Skywaters Residences, 32 Gilstead, and Watten House. Sandrasegeran says that these high-profile sales, although occurring at a moderate pace, reflect the strong interest and investment in luxury real estate in the Core Central Region (CCR).
Looking ahead, Lee of Huttons expects developer sales to pick up significantly in July with major project launches such as Sora, Kassia, and The Green Collection. Sora, a 99-year leasehold project in the Jurong Lake District, sold 102 units during its launch over the July 5-6 weekend, representing about 23% of the 440-unit development. The average selling price achieved was $2,160 psf.
Meanwhile, the final phase of the Flora Drive-Flora Road private residential enclave, 276-unit Kassia, is expected to launch on July 20. The freehold project first launched three decades ago by Tripartite Developers – a joint venture between Hong Leong Holdings, City Developments, and TID (itself a joint venture between Hong Leong Holdings and Mitsui Fudosan).
Another upcoming launch is The Green Collection, featuring 20 strata-titled townhouses overlooking Tanjong Golf Course in Sentosa Cove.
ERA estimates that up to 17 new projects could be launched in the second half of the year, introducing another 8,400 new private residential units to the market. However, Sun of OrangeTee expects most developers to avoid launching their projects during the upcoming lunar seventh month (Aug 4 to Sept 2), also known as the Hungry Ghost Festival, to avoid any negative impact on buyer sentiment.
Leonard Tay, head of research at Knight Frank Singapore, predicts that sales volume is likely to remain subdued until interest rates start to fall. However, he expects new private home prices to increase by around 3% to 5% this year due to the high land costs committed 12 to 18 months ago, as well as high construction and development costs.
Knight Frank also projects that the private residential new sale market will transact between 4,000 and 6,000 units this year, which is significantly lower than the 7,000 to 9,000 units they previously predicted at the start of the year.