One-hit wonder: Private home sales crash 67% in June

Properties in the OCR dominate sales.

It has been a lacklustre month for the country’s residential home developers. June’s bleak sales have become all the more darker after the stunning surge in private home sales in May.

According to PropNex, private home sales slowed more than 67% in June after it rose in May to their highest
in almost a year. As a result, developer sales remain subdued in June with a total of 418 units launched and 482 units sold (excluding ECs).

“The combination of given the cautious buying sentiments, seasonal effects of the June school holidays and fewer new launches dampened the volume of transactions. The Outside Central Region (OCR) sub-market was the most active, accounting for over 55 per cent of new private home sales, while Rest of Central Region (RCR) and Core Central Region (CCR) accounted for 34 per cent and 9 per cent respectively,” noted PropNex.

Here’s more from the report:

While the May sales data may be interpreted positively, it would be premature to conclude that the market has revived from its slump. The exuberant private home market in May was largely due to two huge projects (Coco Palms and Commonwealth Towers) which accounted for over half of the month's launches and sales respectively.

However, we could see healthy monthly sales in the future if more projects are priced realistically at levels that would draw in buyers

Ultimately, what matters in the current challenging environment is price--both on a psf and absolute basis. While selected projects which are reasonably priced and well located will continue to attract homebuyers, prices are expected to come under some pressure as the potential pool of buyers shrink and developers face stronger competition for consumer dollars.

This could be exacerbated by the sizeable residential supply that is expected to come on-stream, turning the market in favour of homebuyers. The general expectations among buyers for a price correction are also likely to keep prices in check.

While selected projects which are reasonably priced and well located will continue to attract homebuyers, prices are expected to come under some pressure as the potential pool of buyers shrink and developers face stronger competition for consumer dollars.

This could be exacerbated by the sizeable residential supply that is expected to come on-stream, turning the market in favour of homebuyers. The general expectations among buyers for a price correction are also
likely to keep prices in check.