The total of new private homes sold in 2020 hit about 10,000 in a year when Singapore recorded its worst recession as a global pandemic forced lockdowns in many countries. This would put it roughly on par with the number of new homes sold in 2019, once aborted sales are accounted for.
The preliminary tally for 2020 comes as developers sold 1,217 new homes in December, up almost 60 per cent over the November figure.
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This is according to December caveats filed with the Urban Redevelopment Authority (URA) this week, noted Christine Sun, OrangeTee & Tee director and senior vice-president of research and analytics.
To be clear, the December transactions could change when URA releases its monthly sales data this Friday and again when the Q4 Real Estate Statistics is published on Jan 22, due to downward adjustments for aborted sales.
If the final figure is lower when aborted units are factored in, the total new homes sold for 2020 could be on par with the 9,912 units sold in 2019, said Ms Sun. It would also be above the 8,795 units sold in 2018.
On a yearly basis, December sales more than doubled from the 538 units sold in December 2019.
New home sales were mainly driven by two key launches last month – the 640-unit Clavon, which sold 473 units, and 660-unit Ki Residences at Brookvale, which moved 172 units.
As such, Outside of Central Region (OCR) accounted for 75.9 per cent of the total new home sales, while 19.1 per cent of sales were in the Rest of Central Region (RCR) and 4.9 per cent were in the Core Central Region (CCR).
The other top-selling projects include Parc Clematis, Treasure at Tampines, Jadescape and Piermont Grand.
The key driver pushing sales is low interest rates, and this is seen elsewhere too, said Desmond Sim, CBRE’s head of research, Singapore and South-east Asia. He noted that low rates in the United Kingdom and the United States have also led to healthy home sales there.
While the recession has led to job losses, there are cash-flush buyers who have benefited from “wealth creation over the past three to five years,” he said. These buyers include en-bloc millionaires, he added.
The last big wave of en bloc or collective sales occurred in 2017 and 2018 as many homeowners jumped on the bandwagon and developers actively leveraged on the potential of many existing developments. The real estate market witnessed about 31 deals in 2017 for a total of S$8.5 billion, and 36 deals in 2018 for a total of S$10.3 billion.
Homebuyers’ optimism has pushed prices up. According to the URA flash estimate published on Jan 4, prices of private homes in Singapore rose 2.1 per cent quarter-on-quarter in Q4 2020 in the highest quarterly increase since the 3.4 per cent notched in Q2 2018 before the last round of cooling measures kicked in. This comes on the heels of a 0.8 per cent increase in Q3 2020. For 2020 as a whole, prices rose 2.2 per cent.
In 2019, the private residential property index grew by 2.7 per cent.
The property price index can still increase because the prices of the transacted units in 4Q 2020 were higher than the preceding quarter, said Nicholas Mak, ERA Realty’s head of research & consultancy.
The median unit price in Q4 2020 was S$1,734 per square foot, up 3.1 per cent over Q3, said Ms Sun.
Developers’ sales in the first week of the New Year has been brisk, with foreigners picking up some luxury units, said Lee Sze Teck, Huttons Asia research head.
Developers’ sales for the week of Jan 4-10 were 135 units, up 15 per cent over the last week of December, said Mr Lee.
The CCR accounted for 14.1 per cent while the RCR and OCR made up 30.4 per cent and 55.6 per cent, he said.
The top-selling project in the CCR was Nouvel 18/V on Shenton, followed by Kent Ridge Hill Residences in the RCR and Treasure at Tampines in the OCR.
This year we will also have other new projects in CCR launching, for example, Irwell Bank Residences.
“Several high-end luxury projects saw foreigners picking up units in the last week, probably an early indication that foreigners’ interest may be returning,” he said.
According to Ms Sun, permanent residents and business travellers are among the foreigners picking up new homes.
“We are seeing more buyers visiting the showflats. There are some buyers who are eager to acquire their target units and willing to pay higher prices if necessary. They may believe that the worst of the pandemic is behind us,” said Mr Mak.