Number of private homes sold by developers up only a tad in April

[reporter2]

Number of private homes sold by developers up only a tad in April

Property consultants had expected more launches and sales by developers for the month

Wed, May 16, 2018

Kalpana Rashiwala


CONTRARY to earlier market expectations, the number of private homes sold by developers in April rose just 1.8 per cent over March - as they continued what one analyst termed a "leisurely" pace of launches.

Property consultants had expected a notable increase in sales volume for April with some big launches.

JLL national director Ong Teck Hui said: "The 3.9 per cent quarter-on-quarter rise in the private home price index of the Urban Redevelopment Authority (URA) in Q1 2018 suggests the possibility of a good upside in prices, which would encourage an unhurried stance towards launches in order to capitalise on the price increase." The 729 private homes (excluding executive condo or EC units) developers moved in April was up slightly from the 716 units in the month before, but down a hefty 53.5 per cent from the 1,567 units sold in April 2017, going by data from URA on Tuesday, which is based on its survey of licensed developers.

This pattern is mirrored in the number of launches. Last month, 654 new private homes were launched, up from 614 units put on the market in March, but a mere 40 per cent of the 1,616 units launched last April.

A similar pattern emerged in the first four months of 2018, with an estimated 1,575 private homes launched for sale, down 56 per cent from the 3,565 units released in the same period last year.

Likewise, the number of private homes developers sold in the first four months of 2018, at about 2,310 units, was only about half the 4,529 units they moved in the year-ago period.

However, not all developers are taking their time to release projects. Last month, Oxley rolled out The Verandah Residences in Pasir Panjang, as did Lendlease for Phase 2 of Park Place Residences at PLQ in Paya Lebar.

Later this month, an Oxley-led consortium is expected to begin previewing Affinity@Serangoon.

In July, after the June school holidays, UOL Group will release The Tre Ver, its 729-unit condo on the former Raintree Gardens site in Potong Pasir.

A seasoned developer outlined three strategies being adopted by developers facing cost pressure from having paid high land prices in the past 15 months or so: "Some want to sell as quickly as they can, before more supply comes on. Some are getting brand-name architects and getting high-quality specs and finishes. Some are focusing on keeping overall lump-sum prices of units in their development affordable by building a high proportion of one- and two-bedders and/or having more compact units.

"To sum up, the first group of developers is playing a time game, the second group, a quality game, and the third group, a quantum game."

CBRE Research's analysis showed that indeed, the market is driven by total price quantum; 84.3 per cent of new private home sales in the first four months of this year came in at under S$2 million.

Desmond Sim, head of Singapore and South-east Asia at CBRE Research, said: "In light of rising per square foot (psf) prices, we expect the current trend of smaller units for new sales to continue.

"We have also observed that the median area fell 29.7 per cent from 980 sq ft in January 2018 to 689 sq ft in April 2018. In order to maintain a palatable absolute price quantum, size is compromised.

"On the other hand, median psf prices increased 18.2 per cent from S$1,524 psf in January to $1,801 psf in April."

URA's data also showed that developers moved 596 executive condo or EC units in April, more than eight times the 72 units in the previous month and 1.6 times the 371 units they moved in April last year.

ECs are a public-private housing hybrid.

The strong EC sales last month came on the back of the launch of Rivercove Residences in Sengkang - the one and only EC launch for this year, which absorbed the pent-up demand after the sell-out launch of Hundred Palms Residences EC last year.

The pool of launched but unsold EC units shrank to just 193 units by end-April, a reflection of the crunch among EC units.

JLL's Mr Ong said: "With only the Sumang Walk EC project in the future launch pipeline and only one EC site scheduled to be out for tender in June, the EC market will remain under-supplied, so the upward pressure on prices will continue."

The Sumang Walk project can be launched only in the second half of next year.

ERA Realty Network is expecting developers' sales to reach 13,000 to 15,000 private homes and between 950 and 1,050 EC units this year.

Last year, developers sold 10,566 private homes and 4,011 EC units.

[reporter2]

Private home sales down 53.5% year-on-year

May 16, 2018

But EC units see strong sales on launch of Rivercove Residences in Sengkang


Developers sold 729 private homes last month, up slightly from the 716 units in March but down 53.5 per cent from the 1,567 units moved in April last year.

The figures exclude executive condominiums (ECs).

As for EC units, 596 were sold last month, well up on the 72 in March and the 371 sold in April last year, according to Urban Redevelopment Authority data yesterday.

The strong EC sales were on the back of the launch of Rivercove Residences in Sengkang.

"This is the only EC launch for this year, soaking up pent-up demand after the sell-out launch of Hundred Palms Residences EC last year," said Colliers International research head for Singapore Tricia Song.

ZACD Group executive director Nicholas Mak noted that the total number of unsold EC units dropped to just 193 last month, with no more on sale until the EC development in Sumang Walk in Punggol is launched next year.



JLL national director of research and consultancy Ong Teck Hui said the upward pressure on EC prices will continue.

Huttons Asia research head Lee Sze Teck, who expects the 193 unsold EC units to be gone within three to six months, said: "More EC sites need to be launched."

The top-selling project last month was Rivercove Residences. The developer, a Hoi Hup Realty-Sunway Developments joint venture, moved 512 units at a median price of $970 per sq ft.

Meanwhile, a joint venture between Lendlease and Abu Dhabi Investment Authority sold 166 units at Park Place Residences at PLQ, a private development in Paya Lebar Road, at a median price of $2,060 psf in the second-phase launch of the 429-unit development.

The median price is about 14 per cent higher than the $1,805 psf median price for the 217 units sold during the first phase of the project's launch in March last year.

Oxley Holdings sold 141 units at The Verandah Residences in Pasir Panjang Road at a median price of $1,846 psf. Roxy-Pacific Holdings moved 52 units at Harbour View Gardens, also in Pasir Panjang Road, at $1,763 psf median price. City Developments sold 51 units last month at The Tapestry in Tampines at $1,391 psf median price.

JLL noted that only 654 new private homes were launched last month, just 40 per cent of the 1,616 units launched in April last year.

About 1,575 private homes were released from January to April - down 56 per cent from the 3,565 launched in the same period last year. And the number of private homes sold in the first four months of 2018 - about 2,310 units - was only about half of the 4,529 units moved in the same period last year.

Ms Song noted that the sales momentum for new private homes last month "was perhaps not as pacey as the market had expected".

"We think the relatively small project sizes of the new launches in April - coupled with raised prices in the limited unsold stock - could have resulted in the slower pace of sales growth in April," she added.

Analysts expect developer sales of private homes to rise this month, given that a few projects have already been released and sold well - including Twin VEW in West Coast Vale, and Amber45.

More are slated for release, including Phase 2 of Le Quest in Bukit Batok.