Private residential units sold by developers in May 2020
Senior Director of Research & Consultancy Ong Teck Hui comments on Singapore's residential sales figures for May
On 15 June 2020, the Urban Redevelopment Authority (URA) released the data on developer sales for the month of May 2020.
A summary of the launches and sales is provided in the Appendix.
“While 486 new private residential units sold by developers in May is a 75.5% increase from the 277 units sold in April, it is by no means a robust figure compared to the 952 units sold in May 2019. It indicates that the primary market is far from dead despite the circuit breaker, although it is also not back to pre-COVID levels.
Better sales performance in May compared to April could be attributable to the confidence among buyers, notwithstanding negative news on the expected recession this year. The confidence could be due to the government’s positive efforts in containing the spread of the virus as well as its prompt and decisive budget measures amounting to nearly $100 billion to support businesses and employment.
In the first five months of this year, developers have sold an estimated 2,912 new private homes, 17.4% less than the same period last year. During the circuit breaker months of April and May, the sales volume was 54.8% lower than the same months in 2019. Assuming easing of the circuit breaker enables show flats to reopen in 2H20, the sales volume for the next half of the year could be 20% to 30% lower than in 2H19, due to the effects of the recession. Based on this analysis, sales of new private homes by developers in 2020 could range between 7,000 and 8,000 units.
If this materializes, it will be indicative of a highly resilient market supported by firm underlying demand. Based on 7,000 to 8,000 units sold in 2020, the drop from sales of 9,912 units in 2019 would be about 19% to 29%. This would compare favorably to the sales of 7,316 units in 2014, a 51% plunge from 2013, due to the cumulative effects of the cooling measures and the TDSR imposed up to June 2013.”
The implementation of the circuit breaker from 7 April 2020 has continued to affect residential market launch activity in the month of May.
615 new private homes were launched for sale in May, 3.9% lower than the 640 units placed on the market in April and 55.9% lower y-o-y. In addition, there was no new project launched in May as show galleries remained closed due to the circuit breaker.
The bulk of the units launched for sale in May was from Parc Clematis (335 units) and Jadescape (200 units) which accounted for 87.0% of the total launched.
Surprisingly, even though launch volumes dipped marginally in May, sales performance was more sanguine with 486 units sold by developers, a 75.5% increase from the 277 units taken up in the previous month. Nonetheless, compared to 952 units sold in May 2019, it was a significant drop of 48.9%.
While there is a significant improvement in the sale of new private homes by developers in May compared to that in April, it was not a broad based improvement as stronger sales were registered in projects that were generally more competitive in terms of pricing and affordability.
The top selling projects are listed in Table A below. Most of the projects that achieved stronger sales in May such as Treasure At Tampines (56 units), Parc Clematis (55 units) and The Florence Residences (54 units) are located in the OCR submarket which has more affordable pricing.
Table A - Top Selling Projects
|Treasure At Tampines||OCR||56||$1,360|
|The Florence Residences||OCR||54||$1,513|