September sales boost anemic home sector

A total of 2,064 units were transacted last month, a 25.8% jump from August.

Amongst this, 1,631 private properties were transacted, +20.7% MoM and 433 ECs were transacted, +49% MoM. The sales volume was mainly driven by 81% of total units sold in the OCR, eg. the Treasure Trove.

In a statement, DMG Research said that while the demand seen in July and August has flowed through to September as seen in the data recently released by URA, supply side policies are likely to moderate prices in the long term.

“The firm transaction volume in the mass segment is in line with our view which highlighted other factors that has attributed to near term firm prices in the residential segment on the i) back of low interest rates ii) positive carry and iii) underlying demand for housing, as well as supported by our alternate analysis identifying the mass segment still in the hedge phase of the Minsky’s cycle,” the research agency said.

DMG Research earlier said that post January cooling measures, supply side policies is expected to be the main moderating tool by the government to address the housing affordability issue in the long run.

The government recently announced that it is releasing 4 sites yielding c.1,900 units (from URA and HDB) on top of 13,825 units already released through the GLS this year.

Of the four sites, a residential site at Alexandra Road is launched for sale through the confirmed list which is a prime site in close proximity to the Redhill MRT, potentially yielding 545 units.

The other three sites are expected to yield 35 landed homes in Bukit Panjang, 540 units in Punggol and 770 EC units (reserve list) in Seng Kang.