OrangeTee Research: Analysis of Launch and Sales of Units by Developers in 2018 June
Sales slid on the back of the holiday season and higher launch prices
Private new home sales took a beating in June as a result of the holiday season and new projects being launched at new benchmark prices. According to developers’ sales survey by the Urban Redevelopment Authority for June, developers sold 42% less private homes (654 units excluding Executive Condominiums (ECs)) on a month-on-month (m-o-m) and 20% on a year-on-year (y-o-y) basis. Including ECs, sales dipped 44% m-o-m and 34% y-o-y to 706 units.
726 units were launched in June 18, the highest number of units launched in the month of June since 2013 (1,768 units excluding ECs). Sales volume did not match the market confidence of some developers as many key projects were launched at new bench mark prices in June. In Serangoon planning area alone, 456 units were launched from The Garden Residences and Affinity at Serangoon. 64 units or 41% of the 156 launched units at The Gardens Residences and 107 units or 36% of the 300 launched units at the Affinity at Serangoon were sold in June. Sales for both projects could have been stronger if their launches were better spaced. Both projects were essentially targeting the same pool of buyers and were cannibalising each other’s market share by launching the projects together.
Moving forward, sales are expected to surge in July as over a thousand units were sold in Stirling Residences, Park Colonial and Riverfront Residences. However, we expect new sales to fall thereafter as a knee-jerk reaction to the latest cooling measures. August may especially see a large dip in sales volume due to the lunar seventh month, which usually sees slower sales. Now, we are seeing more first timers in the new launches as they are less affected by the cooling measures. The trend is likely to continue as the stabilising prices will present good buying opportunity for first timers who can afford to pay the extra 5% cash / CPF down payment (as a result of the lower LTV limit). We expect the full-year sales to be between 8,000 and 9,000 units.
OrangeTee is a reputable, dynamic and fast-growing real estate company in Singapore. Established in 2000, the company has over 3100 management and support staff, real estate consultants and managers, property management specialists, and information technology consultants, working together with the single aim of providing a one-stop solution to the real estate needs of its corporate and individual clients.
OrangeTee is also the first in Singapore to launch PropertyAgentsReview, a property agent search engine that is powered by peer reviews.