Developers’ sales went gangbusters, surging to a 16-month high in July at 1,724 units (excluding Executive Condos) - thanks to a flood of transactions on July 05, as prospective home buyers rushed to lock in their home purchases before the new cooling measures kicked in the following day.

This brings the total number of new homes sold to 5,671 (excl. ECs) in the first seven months of 2018, 21% down from 7,151 units (excl. ECs) transacted over the same period a year ago.

July’s new home sales – up by 163.6% from 654 units June - were the highest since the 1,780 units sold in March 2017. On a year-on-year basis, developers sold 55% more private homes last month compared with the 1,112 units shifted in July 2017.

Developers launched a whopping 2,239 new units in July – the highest since March 2013 where 3,489 new private homes were placed on the market.

As expected, three new launches led sales last month: Riverfront Residences in Hougang sold 628 units at a median price of SGD1,307 psf; Park Colonial in Woodleigh Lane moved 429 units at a median price of SGD1,756 psf; and 339 units were sold at Stirling Residences at a median price of SGD1,746 psf.

If you exclude the number of last-minute sales clocked the night before the measures kicked in, which were reportedly 510 for Riverfront Residences, 310 for Park Colonial, and 200 for Stirling Residences, there appears to be still reasonable demand after the measures took effect to tune of 118, 119 and 139 units for these projects respectively. We believe this reflected genuine demand, undeterred by the higher additional buyer’s stamp duty and lowered loan-to-value limits. 

With Riverfront Residences and Park Colonial already crossing 43% and 53% sell-through rates, we think they have found a price equilibrium and are unlikely to slash prices. Earlier-launched projects – Margaret Ville and The Tapestry - continued to chalk up sales in July, bringing sell-through rates to 40% and 56% respectively. 

In late-July, Daintree Residence, which was the first launch after the measures, saw 46 units sold at a median price of SGD1,716 psf.  The relatively weaker sales could be due to the competing new launches which are nearer to MRT stations, and its benchmark pricing which appeared to be at a premium to its nearby comparable projects.  

Tre Ver, the second major launch after the cooling measures, sold 140 out of 200 launched units (total: 729) at an average price of SGD1,550-1,600 psf, within the first three hours of its first day of launch in early August. 

Top 10 selling projects in the month of July 2018

Source: Colliers International Singapore Research, URA

We believe the new measures implemented on July 06 will probably prevent prices from a continued surge. Hence, barring an external shock, we expect on average, prices to hold relatively flat for the rest of the year. From the recent launch take-up, there is still demand for properties that are well-located and priced realistically.  

The unsold inventory of ECs which are a public-private housing hybrid continued to wind down with 52 units sold in July, down from the 72 units shifted in June. As at end-July, only 21 EC units remained unsold.

The top selling EC project in July was the 628-unit Rivercove Residences which sold 19 apartments at a median price of SGD958 psf. According to the Urban Redevelopment Authority’s data, the Anchorvale Lane project is nearly sold out with just one unsold unit as at 31 July. This is an outstanding performance, given this was launched only in April 2018 and at a benchmark median price for ECs at over SGD950 psf.  This has perhaps brought about a major re-rating of the EC segment, as well as maintained developer interest in this niche segment, despite the cooling measures. The EC land at nearby Anchorvale Crescent which was in the Reserve List in the H2 2018 Government Land Sales, has been triggered for tender at a minimum price of SGD255 million or SGD461 psf ppr. 

We expect ECs to continue to be popular as they cater to the “sandwiched” class and prices are affordable at/or below SGD1,000 psf. 

We believe the robust sales in July reflected the relatively healthy demand for homes and ample liquidity in the market. New home sales will likely slow significantly hence forth as prospective buyers adopt a wait-and-see approach following the introduction of the fresh cooling measures. Transaction volumes in August and September could be particularly sluggish owing to the Hungry Ghost festival where some buyers may prefer to hold back purchases.

For the whole of 2018, we project home sales to come in at 8,500-9,000 units (excluding ECs), 15-20% lower than last year's 10,566 units. Based on our observation, some projects that could potentially be launched for sale this year include: Jadescape (former Shunfu Ville), Jui Residences (former National Aerated Water Company building), and Parc Esta (former Eunosville).  

That said, we do not rule out some developers potentially delaying launches as they reassess the market and re-strategise after the measures were rolled out.