Staggering home sales surge in July a mere blip, analysts warn

Developer sales with plunge in August.

Singapore’s new home sales jumped to a two-year high last month after developers sold a total of 1,594 units. But analysts warn that the staggering sales figure is an exception and should not be taken as a sign of a substantial recovery in the property market.

“In my opinion, this stunning performance in July is an exception and it is not likely to cause a major shift in our forecast on the overall transaction volume,” said Dr Chua Yang Liang, Head of Research for Singapore and South East Asia at JLL.

Dr. Chua noted that the unexpected surge was driven only by one project, namely High Park Residences in Fernvale Road. The 1,390-unit development next to Thanggam LRT station sold a total of 1,169 units last month for a median price of $989 psf.

Excluding this development, developer sales volume excluding ECs dropped to just 425 units, fairly stable from that observed in June.

“Towards this end, I hold on to my previously held view that new sales in 2015 should remain at between 6,500 to 7,500 units,” added Dr Chua.

After strong sales in July, a number of negative factors are also expected to drive new home sales down in August and September.

“[We expect] the next two months to be relatively quiet due in part to the Jubilee celebrations, the election fever and the lunar seventh month, which will probably spook sales. Only a handful of major projects of more than 300 units and a few prime district projects are expected for the rest of the year,” said Desmond Sim, Head, CBRE Research, Singapore and South East Asia.