November’s new home sales mark a good end for 2019
2019 is looking to be a good year for the Singapore property market after all. November’s new home sales rose by 23.2% month-on-month, as developers launched several projects before the new year. Here’s why this is a good sign for the Singapore property market, according to Christine Sun, Head of Research and Consultancy, OrangeTee & Tie.
Jump in November sales on the back of new launches
Developers are riding on the positive sales momentum with a final burst of launch activities before the year-end holidays. Last month, a number of projects were launched, including Dairy Farm Residences, One Holland Village Residences, Sengkang Grand Residences, The Iveria and Pullman Residences, Newton. A total of 740 private homes were launched in November. In comparison, 892 units were launched for sale in October.
Private home sales rebounded last month in view of a slew of property launches. According to developers’ sales survey by the Urban Redevelopment Authority, 1,147 new homes were sold last month, up 23.2 per cent from the 931 units in October, and 4.5 per cent lower than the 1,201 units sold in November last year. Including executive condominiums (EC), developers sold 1,168 units last month, registering a 21.9 per cent m-o-m increase. The best-selling projects were Sengkang Grand Residences, Parc Esta, One Holland Village, Jadescape and Parc Botannia.
Developer home sales are expected to end on a stronger note this year. Our earlier optimism for the private residential market is proven to be true with more sales inked in the first 11 months of 2019 when compared to the whole of last year (8,795 units). Based on preliminary estimates using URA data, 9,547 new homes excluding executive condominiums were sold from January to November this year (i.e. 7,469 units sold in Q1-Q3, 931 units in October and 1,147 units in November). Given that the average number of units sold in the month of December for the last six years was about 380 units and taking into account lapsed options or ‘returned units’, we estimate that between 9,500 and 10,000 units could be sold in 2019.
The U.S. and China had reached a phase-one trade agreement in principle, which may help de-escalate trade tensions and boost market confidence. We anticipate that the next wave of inbound capital may continue to enter Singapore’s property market next year with more Chinese capital flowing south. Further, an increasing pool of investors around the world are diversifying their investment portfolios by location and sectors, and Singapore will continue to be featured prominently as one of the top investment destinations. Further mortgage rates may remain low or clock in even lower next year, which may keep housing demand to ‘cruise’ at current levels. As such we estimate that between 9,000 and 9,800 new homes excluding executive condominiums could be transacted in 2020.