Ms. Tricia Song, Head of Research for Singapore, Colliers International:
“New home sales surged in March, boosted by healthy take-up at City Developments’ The Tapestry in Tampines – the first major launch this year. The increase was well within expectation given the pent-up demand for homes and limited number of new projects on the market in the past months.
Developers sold 716 new homes (excluding Executive Condos) in March, up by 86.5% from 384 units in February, dominated by the 329 units sold at The Tapestry. However, it was a sharp 59.8% lower than the 1,780 units sold in the corresponding period in 2017. March 2017 was a multi-year high owing to two large launches in March 2017 – Park Place Residences and Grandeur Park Residences which collectively sold 701 units.
The best-selling private residential project last month was The Tapestry - which shifted 329 units at a median price of SGD 1,408 psf– accounting for about 46% of the transactions. This was followed by Grandeur Park Residences which sold 40 units at a median price of SGD 1,532 psf and Kingsford Waterbay where 32 units were transacted at a median price of SGD1,377 psf.
In a sign that continued to affirm the resilience in mass market residential segment, the transacted median price of units at The Tapestry (SGD1,408 psf) in March was markedly higher than the launch prices of nearby projects: The Alps Residences with a median price of SGD1,078 psf when it was launched in October 2016; The Santorini at SGD1,108 psf in March 2014; and Q Bay Residences at SGD1,012 psf in January 2013.
Earlier, flash estimates by the Urban Redevelopment Authority showed Q1 2018 private home prices grew 3.1%, the strongest quarterly increase since the 5.2% QOQ rise in Q2 2010. We expect prices to grow by 17% between 2018-2022(Forecast), in tandem with the stronger economic outlook.
In the EC segment, developers sold 72 new units in March, down from the 92 transacted in the previous month in the absence of fresh launches. In April, we expect EC sales volume to get a lift from the only new EC launch in 2018 - Rivercove Residences which already sold nearly 80 per cent of its 628 units when the project was launched over the weekend.
The average price of SGD965 psf at Rivercove Residences was also a new high for ECs. The previous record for ECs was set by Lake Life, near Jurong East, which launched and fully sold at SGD870 psf in November 2014. While it was not a surprise that Rivercove Residences did well, due to the lack of new EC supply which caters to the ‘sandwiched class’, the sharp increase in prices also reflects a strong re-rating for EC and private home prices in the Sengkang/ Punggol area.
It is widely expected that the new EC which will be launched next year at the Sumang site north of Rivercove Residences, could be priced at over SGD1,000 psf. This would be comparatively higher than other ECs in the Sengkang/Punggol vicinity which have launched at SGD750-813 psf median prices between 2013-2016.
Q1 sales and 2018 outlook
Factoring in March’s sales volume, Q1 2018 developer sales could tally 1,624, down 45% from Q1 2017’s 2,962. This is due to a later start for launches this year as major new projects are scheduled to hit the market from April onwards. Despite the slower Q1, we think sales will continue to pick up in 2018 with a slew of launches expected for the rest of the year.
Already, the brisk take-up of new units at two developments recently - The Verandah (reportedly sold 129 of its total 170 units in its April 7 launch) and Park Place Residences (reported to have sold 149 units during its Phase 2 launch) – will give a fillip to developer sales in April. Amber 45, Twin Vew and Margaret Ville are also tipped to launch in the near term.
For the full year 2018, we forecast new home sales could rise by 19% year-on-year to 12,600 units (excluding ECs) from the 10,566 units in 2017, due to more project launches from Government land sales and collective sales.”