Apartments in Woodlands, Singapore. (Photo: Unsplash/Feng Lihang)
SINGAPORE: Sales of new private homes in Singapore rose 82.2 per cent in July, rebounding from three consecutive months of decline, as buyers returned to the residential market "in droves" despite tighter COVID-19 restrictions.
Excluding executive condominiums, developers sold 1,589 units in July compared to 872 units in June, according to data released by the Urban Redevelopment Authority (URA) on Monday (Aug 16).
That made July the second-highest month of sales so far in 2021, after the 1,633 homes moved in January.
Suburban developments attracted the most buyers in July, with developers selling 1,012 units in the Outside Central Region (OCR), followed by the Rest of Central Region (RCR) with 438 units and the Core Central Region (CCR) with 139 units.
FEAR OF BEING PRICED OUT OF MARKET
Analysts said July's strong demand was driven by a variety of factors, including developers who were keen to close more deals ahead of Hungry Ghost Festival month, as well as buyers who feared "being priced out of the market".
This came despite tighter COVID-19 restrictions that took effect from Jul 22.
"The tightened measures did not seem to dampen market sentiment significantly," said Ms Christine Sun, OrangeTee & Tie's senior vice president of research and analytics.
"Sales picked up across many projects last month as buyers returned to the private residential market in droves," she added.
PropNex Realty CEO Ismail Gafoor said the firm believed that market "exuberance" was catalysed by the bidding prices in recent Government Land Sales tender activity.
"The news of aggressive land prices triggered many to realise that future launch prices are likely to rise further," said Mr Gafoor.
"A good number of investors and buyers, (who) have been waiting for the right opportunity, decided to enter the market in July, in anticipation of possible price hikes in the future."
Mr Ong Teck Hui, senior director of research and consultancy at JLL, said that while the residential market is "fundamentally buoyant", it is also being suppressed by COVID-19 and restrictive measures.
"The spread of infections accompanied by tightening of measures, followed by reduction in infections and easing of measures could result in a see-saw market which makes it more difficult for buyers and sellers to plan ahead," he said.
He said that the market will regain a more regular rhythm along with higher vaccination rates and the economy eventually opening up.
Developers launched a total of 1,104 units in July. Analysts identified Pasir Ris 8 as one of the best-selling developments, with 418 units sold out of 487 launched.
The robust take-up of Pasir Ris 8 and other projects such as Midwood and Sengkang Grand Residences contributed to an increase in average median prices in the OCR, from S$1,616 per sq ft in June to S$1,626 in July, said Mr Lam Chern Woon, head of research and consulting at Edmund Tie.
In contrast, both the RCR and CCR recorded declines in average median prices.
"The sales and pricing movement suggest that homebuying demand remained buoyant especially in the suburban locations where the pricing quantums are lower and relatively more affordable," said Mr Lam.
"As work-from-home practices become more entrenched within the economy, homebuyers are gravitating towards less central locations in order to enjoy more spacious living."
Current home supply, especially in suburban regions, is not enough to meet the demand from buyers such as those upgrading from Housing and Development Board flats, said OrangeTee & Tie's Ms Sun.
"Further, developers in Singapore are landbank-starved as en bloc sales have ground to an almost complete halt after the cooling measures," she said, adding that developers' demand for land will continue as they pare down their unsold stock.
Unsold supply has dropped for nine consecutive quarters to reach 19,409 units in the second quarter of 2021 – a record low since the fourth quarter of 2017, said Mr Wong Xian Yang, Cushman & Wakefield's head of research for Singapore.
Barring new cooling measures, total new private home sales are on course to exceed 11,000 units by the end of the year, reaching the highest annual new sales figure since 2013, he added.