Developers’ sales plunged 64.3% to 616 units (excluding Executive Condos) in August, from a 16-month high of 1,724 units in in July. This reflects the true effect of the measures as July’s figure was boosted by last-minute transactions on July 05, as prospective home buyers rushed to lock in their home purchase before the new cooling measures kicked in the following day.


However, this figure is not too bad, compared to the 482 units sold in July 2013, a fall of 73.3% MOM a month after the eighth round of cooling measures which introduced the Total Debt Servicing Ratio (TDSR), in June 2013.  

On an annual basis, developer sales were 50.6% lower than the 1,246 units recorded in August 2017. This brings the total number of new homes sold to 6,287 in the first eight months of 2018, 25.1% down from 8,397 units transacted over the same period a year ago.

Only 534 units (excluding Executive Condos) were launched in August, compared to the five-year high 2,239 units launched in July. Besides the wait-and-see stance post the measures, developers have also avoided launching new projects during the Hungry Ghost festival, which ran from 11 August to 9 September this year, where some buyers may prefer to hold back purchases.  

There were four new launches in August – The Tre Ver, 8 Saint Thomas, Casa Al Mare and Mont Botanik.  Of these, The Tre Ver was the top seller in August, with 164 units sold at a median price of SGD1,551 psf. 8 Saint Thomas sold 18 units at a median price of SGD3,215psf. Casa Al Mare, at Pasir Ris, sold nine units at a median price of SGD1,597psf. Mont Botanik sold two units at SGD1,979psf. 

July’s top sellers –Stirling Residences, Park Colonial and Riverfront Residences continued to chalk up sales, of 76-91 units each in August, bringing their sell-through rates to 32-57% of total available units. Selling prices appear to be holding up, compared to July’s.  

We believe the new measures – higher additional buyer’s stamp duty and lower loan-to-value limits - implemented on July 06 have been effective in preventing 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 take-up, there is still demand for properties that are well-located and priced realistically.  


Top 10 selling projects in the month of August 2018

 
Source: Colliers International Singapore Research, URA

New launches in the month of August 2018

 

Source: Colliers International Singapore Research, URA

 
Executive Condominiums (ECs)
The unsold inventory of ECs which are a public-private housing hybrid continued to wind down with 23 units sold in August, down from the 52 units shifted in July. As at end-August, only 14 EC units remained unsold.

With most EC projects already sold out, and the next earliest EC launch likely to be after June 2019, qualifying buyers are lapping up whatever remains. The top selling EC project in August was the 628-unit Parc Life which sold nine apartments at a median price of SGD867 psf. It has only three unsold units as at 31 August, and is closed to fully-sold since its first launch in April 2016.  

The good sales and favorable supply-demand dynamics for ECs have lent confidence to developers in the bidding for land in a post-measures regime.  On 10 Sep, nearby EC site at Canberra Link was awarded to Hoi Hup and Sunway at SGD558psf ppr after attracting nine bids. This land rate compares to Parc Life’s land rate of SGD320psf ppr back in July 2014. 

On 14 Sep, a EC site tender at Anchorvale Crescent closed with seven bids and a top bid of SGD576psf ppr.  

Outlook
We believe the sales in August may not yet reflect the underlying demand for homes, given the subdued launches and buying mood post the measures. We expect home sales to continue to be slow, and to average around 600-700 units per month for the rest of the year, as prospective buyers and even developers adopt a wait-and-see approach following the introduction of the fresh cooling measures. 

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. Some projects that could potentially be launched for sale this year include: Jadescape, Mayfair Gardens, The Woodleigh Residences, Jui Residences, and Parc Esta (former Eunos Ville).  We do not rule out some of these projects pushing out into 2019 pending market conditions.