New home sales hit two-year high in 2016 as buyer sentiment recovers

A total of 8,136 units were sold.

Private home developers enjoyed better sales for the whole of 2016 compared to the preceding year, a report by JLL showed.

According to JLL, developers sold 8,136 units, 9.4 per cent more than the 7,440 units sold during the same period in 2015, on the back of improved sentiments and increased demand.

"After reaching a low of 7,316 units in 2014, sales of new private homes have crept up gradually, to 7,440 units in 2015 and 8,136 units in 2016, in tandem with the moderation in decline in the (URA) price index from -4 per cent in 2014, to -3.7 per cent in 2015 and -3 per cent in 2016. The desired soft landing following the cooling measures seems to be occurring rather neatly and will be near perfect if sales improve further this year on the back of continued moderation in price decline," said Ong Teck Hui, National Director of Research & Consultancy at JLL.

In December, sales dropped 4.4% year-on-year due to the year-end holidays. There were no fresh sales launches in December and only 90 private residential units were released from previously launched projects, a mere 6.6 per cent of the 1,363 units that came on the market in November and a 48.0 per cent decline y-o-y

The launch tally for 2016 was 7,853 private homes, 11.3 per cent higher than in 2015 due to developers being more optimistic as sentiments improved.

“While December sales of private homes was subdued, an analysis by the quarter shows that the 2,480 units sold in 4Q16 is the strongest quarterly volume in 2016, as well as since 2Q14. Coupled with 2016’s 9.4 per cent increase in private home sales over the previous year, this reflects a moderate strengthening in demand from buyers driven by a perception of the market bottoming out, pent-up demand, buying opportunities at more realistic prices and acceptance of the cooling measures as a market norm. These trends are likely to persist in 2017 and could result in primary market sales of private homes registering between 8,000 and 8,800 units," added Ong.