COMMENTARY - erasg.s3-ap-southeast-1.amazonaws.com
Transcript of COMMENTARY - erasg.s3-ap-southeast-1.amazonaws.com
Head of Department, Research & Consultancy
Nicholas Mak
ERA Singapore
ERA APAC Centre
450 Lorong 6 Toa Payoh
Singapore 319394Tel: (65) 6226 2000Fax: (65) 6220 0066
COMMENTARY25 May 2021
| 15 July 2021
Putting the worst of the
pandemic behindDevelopers’ sales June 2021
Putting the worst of the pandemic behindDevelopers’ sales June 2021
COMMENTARY
What happened in the private housing primary market inJune
Real estate developers in Singapore released 815 private housing units (excluding
Executive Condominium units) in June 2021, 57.9% more than the preceding month.
Over the same period, they sold 872 private residential units, slightly lower than the
895 units sold in May 2021. The marginally lower sales in June was partly due to the
lack of new major project launches and the effects of the tighter social distancing
measures of Phase 2 (Heightened Alert) which ended on 13 June 2021.
Healthy demand
Although the number of private housing units sold in June was marginally lower, the
demand is still healthy as the take-up rate, which is the ratio of the number of units
sold to the number of units released in the month, is 107.0%. As a result, the number
of unsold private housing units decreased from 13,718 units in May to 13,401 units in
the following month.
Figure 1 | Number of units launched by developers
Source: URA, ERA Research & Consultancy
COMMENTARY
Table 1 | Transaction volume of all private residential properties (excluding EC) in the
primary market
*Note: 2Q 2021 figures are preliminary
Source: URA, ERA Research & Consultancy
Private housing units
launchedPrivate housing units sold
1Q 2021 3,716 3,493
2Q 2021 (p) 2,369 3,037
What happened in 2Q 2021
Based on the preliminary figures released today, property developers launched a
total of 2,369 private housing units in the second quarter of 2021 (2Q 2021), which
was 36.2% lower than the number of homes launched in 1Q 2021. The lower launch
volume in the second quarter was not entirely due to the 4-week Phase 2
(Heightened Alert). The dwindling supply of new residential projects available for
launch also contribute to the lower launch volume.
Figure 2 | Number of units sold by developers
Source: URA, ERA Research & Consultancy
COMMENTARY
As the primary market sales is influenced by the launch volume, it is not surprising
that the number of private homes sold also slipped from 3,493 units in 1Q 2021 to
3,037 units in the following quarter. However, the 13.1% quarter-on-quarter (qoq)
decline in sales in 2Q 2021 was smaller than the 36.2% qoq fall in the number of units
launched over the same period, indicating that housing demand was still healthy, but
some buyers were probably taking more time to consider their home purchases.
Although the number of private homes (excluding EC) sold in the primary market
decreased by 13% qoq in 2Q 2021, property developers managed to sell 3,025
dwelling units in the prime CCR market, which was 22.4% more than the preceding
quarter. This could be because 5 out of 7 new launches in 2Q 2021 were located in
the CCR.
Figure 3 | Non-landed residential price indices
*Note: 2Q 2021 figures are preliminary
Source: URA, ERA Research & Consultancy
COMMENTARY
Best-selling residential projects
The best-selling residential project last month was Hyll on Holland, a freehold 319-
unit condominium located in District 10. It is rather unusual for a project in the CCR
to be the best-selling project in a given month because the best-selling project is
usually a large condo project, which is usually located in the suburban OCR (Outside
Central Region).
The current show flat of Hyll on Holland is going to close down shortly. Hence, the
developer decided to conduct a special price promotion for this project, which
attracted significant interest from homebuyers. It also showed that there were
buyers with the means to buy properties in the prime locations, they just need the
right incentives to put their money on the table. As a result, 87 units in this
development was sold at the median price of $2,387 psf in June. In the first 5 months
of 2021, the median transacted price of this project was reportedly $2,458 psf.
Table 2 | Best-selling residential projects in June 2021
*Note: 2Q 2021 figures are preliminary
Source: URA, ERA Research & Consultancy
Project name Street name Postal district
Total No. of
units in
project
No. of units
sold in June
2021
Median price
($psf) in June
2021
Hyll On
HollandHolland Road 10 319 87 $2,387
Treasure At
Tampines
Tampines
Lane18 2,203 80 $1,411
Normanton
Park
Normanton
Park5 1,862 62 $1,821
The Florence
Residences
Hougang
Avenue 219 1,410 47 $1,661
Midwood Hillview Rise 23 564 46 $1,636
The other four best-selling projects in June were located in the city fringe and
suburban areas. The size of each of these four projects was significantly large,
averaging 1,510 units each. The median transacted prices of the three best-selling
mass-market projects in the OCR ranged from $1,411 psf to $1,661 psf.
COMMENTARY
Executive Condominium market
The Executive Condominium (EC) primary market also experienced the similar issue
of fewer units launched leading to lower sales in 2Q 2021. Developers launched 413
EC units and sold 507 EC units in 2Q 2021. However, the number of launched and
unsold EC units has remained fairly stable in the past 12 months, ranging from 518
units to 726 units. This is because the supply of new EC has been stable as the
government has sold an average of 2 EC sites each year for the past five years.
Table 3 | Number of Executive Condominium units launched and sold in 1H, 2021
*Note: 2Q 2021 figures are preliminary
Source: URA, ERA Research & Consultancy
The monthly supply of new EC units will be lumpy as each EC project is usually
relatively big, averaging 563 units each, based on the past 20 EC projects launched.
When a new EC project is launched, the sales of EC units in that month will number in
the hundreds. In the subsequent months when there is no new EC project launched,
the monthly sales volume will usually hover below 100 units.
EC units launched EC units sold
1Q 2021 700 647
2Q 2021 (p) 413 507
Outlook
In the first half of this year, developers launched and sold an estimated 6,085 units
and 6,530 private housing units (excluding EC) respectively. In the second half of
2021, developers may launch and sell fewer units as their inventory of unlaunched
project is declining. Furthermore, the launch and sales activities could also slow
down during the lull periods in the Ghost Month and year-end festivities. There is also
a risk that there could be another flare up in the coronavirus pandemic locally, which
could lead to another partial lock-down, similar to the Phase 2, which could limit the
sales activities in the property market.
In a sign that the residential property market has put the worst of the pandemic
behind, property developers could sell about 11,000 to 12,000 private homes this
year, achieving the highest annual sales volume since 2013, when developers sold
14,948 private housing units. This is provided that the government does not
intervene too much in the market. After the government introduced further rounds
of cooling measures including the Total Debt Servicing Ratio (TDSR) structure in
2013, the primary market sales volume did not exceed 11,000 units annually.
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