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New home sales rise 18.5% y-o-y in February as buyers defy seasonal lull

Developers sold 455 new units out of 596 units (excluding executive condos or ECs) that were launched for sale in February, according to the latest statistics from the URA. The number of units sold is a 5.1% increase compared to the month before, according to Lee Sze Teck, head of research for Huttons Asia.

The new private home sales in February (excluding ECs) were 18.5% higher y-o-y, despite an uncertain economic outlook and property cooling measures, says Christine Sun, head of research and consultancy at OrangeTee & Tie.

February had been expected to be a relatively quiet month for launches and sales amid Lunar New Year festivities. “No new projects launched for sale in February 2019, similar to February 2018,” says Lee.

Sun says sales in February could have improved on the back of the January announcement of the upcoming Cross-Island MRT Line, which could have enhanced the attractiveness and investment potential of some new developments.

This “catalytic news” caused a surge in demand from buyers that continued to spill over into February, says Lee. Thus, some developers continued to release units from earlier launched projects to satisfy demand from buyers.

According to Desmond Sim, CBRE’s head of research for Singapore and Southeast Asia, the February new home sales figures bring the combined numbers for January and February to 891 units sold and 1,094 units launched. These compare to 911 units sold and 454 units launched over the same period last year, when sentiments were stronger.

The latest statistics show a pick-up in sales last month in already-launched new developments including Affinity at Serangoon (88 units sold), Riverfront Residences (49 units), The Tre Ver (48 units), The Garden Residences (19 units), Stirling Residences (31 units), and Parc Botannia (28 units).

Notably, sales at other existing new developments have plateaued, with “only a handful of projects launched in the second half of 2018 achieving more than 50% of total units sold”, says Sim. “Clearly, buyers are spoilt for choice.”

Sun points out that some developers also raised commissions to incentivise agents to boost their selling efforts for their projects, as developers competed to lure buyers amid the large pipeline of projects expected to launch this year.

Today (March 15), the 2,203-unit Treasure at Tampines has launched for sale, and the project is the biggest residential development in Singapore this year. As one of the key launches this year, the condo is expected to be one of the most attractively priced projects in the current market, says Sun. Its sales performance will be closely watched as a barometer of the overall buying sentiment for the entire private residential market.

“A solid sales number will likely boost the buying sentiment for the entire residential market, paving the way for better sales this year,” she says.

Looking ahead, Sun expects buyers to remain “selective and price-sensitive, preferring projects which are well-located, distinctively designed, and competitively priced”. She says new home sales could ramp up in the coming months on the back of more new launches, including Amber Park at Amber Gardens, Sloane Residences at Balmoral Road and Rivière at Jiak Kim Street.

This means developers will face stiff competition to attract buyers, amid a backdrop of increasing mortgage rates and slowing economic growth, says CBRE’s Sim. “However, with a comfortable leeway to the five-year ABSD [additional buyer's stamp duty] deadline, developers may still hold firm with prices, but will incentivise agents or rely on stronger project attributes to attract buyers.”

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