Rise in private home sales not a reflection of surging demand: analyst

Residential property sales continue to surge since December.

New home sales had risen by 32.2% MoM in January with 1,609 units sold, the strongest sales since 2013 where 2,028 units were transacted according to the Urban Redevelopment Authority sales survey.

The record rise in sales also coincided with the launch of the 1,862-unit Normanton Park and The Reef At King’s Dock in the Harbourfront area. The launch contributing to the high number.

However, PropNex CEO Ismail Gafoor cautioned that the upswing in private new home sales in January is not a reflection of a surging demand.

“In comparison, to the overwhelming rush of buyers to outrun the property cooling measures in July 2018, where a total of 1,724 private new homes were transacted. What we have observed is that location, attractive product attributes, and right pricing are the key factors in driving good take-up rates,” he added.

Meanwhile, demand for private residential homes and executive condominiums (ECs) remains robust, according to Knight Frank Singapore’s head of research Leonard Tay.

He said HDB upgraders who have made decent profits from their Build-To-Order (BTO) units after five years of mandatory residence are able to make the leap to mass market private homes.

“It could also be that older Singaporeans, such as the Baby Boomers, who have made substantial capital gains from their homes or from enbloc sales in the past are now able to channel some of these proceeds to their children, enabling a younger generation to also cross over into private properties," he added.

Luxury home launches to rise

Christine Sun, senior vice president of research & analytics at OrangeTee, said they see more luxury home launches as well as a rise in the proportion of units sold in the Core Central Region.

“Some of the upcoming high-end launches in the prime segment include Midtown Modern, Cairnhill 16, The Atelier, Park Nova (former Park House), Klimt Cairnhill (former Cairnhill Mansions), former Liang Court, and the residential site at Irwell Bank Road,” she said.

KF’s Tay said secondary markets will likely record more sales whilst the new sale market is also expected to be active with about 10,000 new sales.

However, Gafoor of PropNex expects 2021 new home sales to be lower at around 8,000 to 9,000, below the 9,982 units transacted last year.

“A key reason for the lower forecast is that there are not that many large projects in the launch pipeline this year and unsold inventory in the market has also dwindled,” he added.