Chart of the Day: New home sales surged 75% in May

Resale segment slumped 53% to 174 units.

This chart from Propnex research shows that new home sales surged 75% MoM to 486 units in May 2020, which saw the entire month affected by the circuit breaker. Meanwhile, the resale segment slumped 53% to 174 units.

This is compared to the 277 units transacted in the primary market and 370 resale units bought in April.

This decline in resale segment is said to be due to the inability to view properties during the circuit breaker period, as buyers usually prefer to examine the unit in person before transacting.

In contrast, it was observed that buyers of new homes became more comfortable with digital viewings and transacting online from April to May, with attractively priced projects and low interest rates likely nudging them to make a purchase.

The research notes that post-circuit breaker and with the gradual re-opening of the economy, the cautious sentiment and tepid growth would likely weigh on home buying interest and prices generally. However, the MoM rebound in new home sales in May and the return of buyers to pick up units in Phase 2 of the re-opening is a potential sign of underlying demand, particularly for strategically-priced units.