New Private Home Sales up 15% in 2019 with a total units of 10,014.
The increase in new private home sales is mainly due to HDB Upgraders. With a resilient housing market and low unemployment numbers, housing demand remain strong, with 6 out of the top 10 developments last year in the Outside Central Region (OCR). The remaining of the 4 projects come from the Rest of Central Region (RCR).
Housing demand is robust across the board as owners sell up their HDB in the public housing sector to buy in the private property market. There were 10,014 properties transactions in 2019, 14.9% more than the 8,795 transacted in 2018.
Demand from HDB Upgraders
This is not surprising as the majority of the demand came from the HDB upgraders market. With the HDB resale market bottoming out in 2019, this segment of buyers will likely bolster the buying volume in 2020. The HDB resale price index edged up in the last two quarters of 2019.
The sweet spot continues to be family-sized units of two-bedders and three-bedders priced between S$1 million and S$1.5 million, said Tricia Song, Colliers International, head of research for Singapore. 78 per cent of the total private home sales in 2019 were priced at the median price of S$1,000-2,000 per sq foot (psf). Buyers continue to be value-conscious, choosing projects with good locational attributes (near transport links, good schools) and affordable price quantum.
Sales from Developers
Latest data showed that developers in Singapore sold 538 private homes in a seasonally slow December, less than half of the 1,147 units they sold in the previous month and 10.6% lower than the 602 units sold in December 2018.
Developers sold 2,635 units in the fourth quarter of 2019, up 43.5% from 1,836 units in the same quarter a year ago.
The 10,104-unit private home sales for the full year is 14.9% higher than the 8,795 in 2018 and above the 26-year (1996 to 2018) average of 9,899 units, according to Christine Sun, OrangeTee & Tie head of research & consultancy.
The highest number of private home sales was 22,197 in 2012.
Q4 Sales in 2019
The lower sales volume in December was expected because of the year- end school holidays and lack of new launches to excite buyers, said Mr Lee.
Although last month’s private home sales were weak, they were still higher than the December numbers from 2013 to 2017 when developers sold around 230 to 431 units, said Christine Li, Cushman & Wakefield’s head of research (Singapore & Southeast Asia).
Demand for Singapore Property
Singapore’s thriving economy and rising home demand have continued to underpin our private housing market, said OrangeTee & Tie’s Ms Sun. Singapore’s economy in 2019 grew only 0.7 per cent, the slowest in 10 years, yet unemployment remained low. The Q3 2019 unemployment rate for Singaporeans rose to 3.3 per cent, up from 3.2 per cent, while the rate for citizens and permanent residents combined climbed to 3.2 per cent, up from 3.1 per cent.
The healthy level of private home sales transactions in the private property market may provide consumers with the confidence that demand may remain resilient this year, and the likelihood of a price correction is unlikely. Despite a large number of new homes launched over the past year, the market absorption of newly launched units had been strong, and the number of launched but unsold units have begun falling over the past two months.
“Demand may catch up with supply this year since the number of mega-launches is set to fall, especially in the OCR,” said Ms Sun.
Some of the top selling projects in December were Parc Botannia, which moved 49 units at a median price of S$1,345 per sq foot (psf); Parc Esta, which sold 45 units at a median price of S$1,666 psf; and Parc Clematis, which sold 40 units at a median price of S$1,638 psf. Jadescape sold 37 units at a median price of S$1,715 psf and One Holland Village Residences moved 35 units at a median price of S$2,768.
Looking into 2020
In 2020, we could potentially see up to 50 launches and 11,000 units released for private home sale. Around 50 per cent of the launches are in the core central region (CCR).
The high-end market will be one to watch, with a slew of new launches expected to enter the market in 2020 and demand remaining patchy among launches.
There were a total of 19 new CCR launches in 2019 and this could potentially increase to 22 new launches in 2020. These sites are predominately from successful en bloc sales from 2017 to 2019.
Consultants expect sales momentum in 2019 to carry forward this year, with forecast sales volume at a similar level of between 9,000 and 10,000 units in 2020. Prices of new homes may continue to rise this year around 2 to 4 per cent, said OrangeTee & Tie’s Ms Sun.