Sales volume for private residential units up by 79% in November

Sales volume jumped 2.7 times to 1,229 units in the region during the month.

Jones Lang LaSalle said the URA monthly sales volume for private residential units (excluding executive condominiums) rose by 79% m-o-m to 1,909 units in November, led by a sharp rebound in sales activity in the Outside Central Region. If ECs were included, the number of OCR units would have been higher at 1,404 units albeit at a slower growth rate of 43% m-o-m.

The latest figures showed an unusual buzz in a traditionally quiet month, especially after state intervention in August. Compared to a year ago, island-wide sales volume more than tripled while transactions in the OCR expanded almost 8 times.

Overall, the exceptional performance in November is driven by three projects, two of which are located in the OCR, i.e. The Lakefront Residences (500 released units), Waterview (696 units) and the third, i.e. Spottiswoode Residences (300 released units) located in the RCR. Collectively, these projects contributed over 56% of demand and 64% of supply for the month. Removing these projects, the island-wide sales volume is more moderate at slightly over 800 units which is more palatable going by the volume recorded last month.

The pickup in buying activity is mirrored in the prices of caveats lodged. Island-wide median price for non-landed properties under the ‘new sale’ category rose by 13% m-o-m after falling by 9% in the previous month based on data retrieved on 15 December which shows transactions up to 30 November. The corresponding median price in OCR grew by 12% m-o-m in November after contracting in 9% and 7% m-o-m in September and October respectively.

Dr Chua Yang Liang, Head of Research South East Asia at Jones Lang LaSalle commented, “Going by the take up rate in the projects, there is a noticeable trend of projects with strong branding and good locations outperforming those by lesser known developers suggesting that buyers may be looking at the upside potential of these projects. Prices of these projects are above $900,000; higher than what we have observed in the previous months suggesting that bargain hunters are not so active at the moment.

“The low interest rate environment, coupled with the strong urban regenerative plans and overall market demand in these areas, have encouraged more speculative buying into the market. As such, we believe the risk of further policy intervention has been elevated with the soonest policy to be introduced within a month if not by early next year,” Dr Chua added.

Other demand measures include raising the initial deposit and reducing loan-to-value (LTV) ratio for second and subsequent purchases to 15%–20 % and 60% respectively; a higher stamp duty for those who make more than one property purchase within 12 months; but less remotely, a capital gains tax.