This appears to be largely driven by locals and investors.
Singapore’s real estate market rebounded back to life as new home sales transactions, excluding executive condominiums (EC), hiked 75.5% Month on Month (MoM) to 486 units in May 2020 compared to 277 units in April, based on the Urban Redevelopment Authority (URA) latest figures. Including ECs, sales spiked 73.7% MoM from 293 units to 509 units over the same time frame.
The Outside Central Region (OCR) had the majority of units sold with 256 units in the same time frame, whilst the Rest of Central Region (RCR) and Core Central Region (CCR) each had 189 and 41 transactions, respectively.
Consequently, developer new home sales more than doubled in the RCR and OCR by 145.5% MoM and 161.2% MoM respectively. But sales in the CCR declined by 59.8% MoM.
The uptick in sales was due to mainly suburban residential projects like Dairy Farm Residences (OCR), Clavon (OCR) and Avenue South Residence (RCR). A unit at KOPAR at Newton was the most expensive unit sold in May 2020, with a price tag of $7.8m or $2,385 psf.
The Florence Residences, Treasure At Tampines and Jadescape – each recorded a slight rise in their median rates compared to when they were first launched. In the mean time, median prices at Parc Clematis and Parc Esta saw a marginal dip in May 2020.
New launches in the upcoming months include Penrose (RCR) by Hong Leong Holdings’ Intrepid Investments and City Developments Limited.
Head of research & consultancy at OrangeTee & Tie, Ms Christine Sun, sited that May’s sales appear to be mainly driven by investors and locals. “There appear to be more investors jumping into the market as transactions of smaller or lower-priced units climbed last month. These private properties are usually more popular among investors given their attractive investment yield and affordability,” added Ms Sun.
In accordance to URA realis data, the percentage of non-landed new residences bought by Singaporeans climbed to 84.8% in May 2020 from 84.1% in April. By absolute numbers, the figures of non-landed housing purchased by Singaporeans climbed 81.1% to 402 units over the same time frame.
Purchases by foreigners had similarly strengthened in May 2020, as the figures of non-landed new abodes bought by non-permanent residents (non-PRs) and permanent residents (PR) jumped 71.4% from 42 units in April 2020 to 72 units in May.
The number of smaller private homes, excluding ECs, below 800 square feet, also moved up 70% to 319 units in May 2020 from the earlier 188 units in April, whilst the percentage of private home sales excluding EC less than $1m went up from 23.6% in April 2020 to 28.7% in May.
But on a yearly basis, the transaction volume was less 48.9% YoY than the 952 units transacted in May 2019. Notably, the 486 units transacted in May 2020 is the lowest monthly consolidation for the month of May ever since 453 new homes were sold in May 2008.
Considered together, developers have sold 2,912 new residences in the first 5 months of 2020, representing a 17% YoY drop from 3,527 units transacted in the earlier same period of 2019.
Chief Executive Officer of PropNex Realty, Mr Ismail Gafoor, anticipates developers could still sell around 7,000 to 7,500 new units (excluding ECs) in this year, if there is no second wave of Covid-19 infection and global job losses.
In accordance to URA Realis data, 155 new abodes excluding ECs have already been transacted in the first 7 days of June, which is more than half the 277 homes recorded in April 2020. Lee Sze Teck, Director of Research at Huttons Asia, sites that as Singapore moves into the next stage of opening up, real estate sales may continue to be a mix of physical and online viewing of showflats.
“We may envision a recovery back to before the circuit breaker, with sales of 700+ units a month or more, as the more traditional buyers return to the sales galleries,” Lee mentioned.
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