The number of new private homes sold in May jumped 53.1% compared to April and 7.9% compared to the same month last year, according to information released by the Urban Redevelopment Authority (URA) on Monday, 18 June.
Developers sold 1,121 private homes in May 2018, excluding executive condominiums, compared with 732 units in April.
The number of units sold was also the highest since August 2017, when 1,246 new private homes were sold.
Including ECs, 1,257 units were sold in May, a slight drop from 1,328 sold in April and lower than 1,416 sold in the same month last year.
Categorized by location, the Core Central Region (CCR) saw 43 units sold; the Rest of Central Region (RCR) saw 286 units sold; the Outside Central Region (OCR) saw 792 units sold.
In terms of launches, 56 units were launched in the CCR; 170 in the RCR and 834 in the OCR.
The number of new homes launched for sale was 1,060, three times the 370 units launched in the same month last year, and 60% higher than the number launched in April.
One reason for the marked improvement in home sales was the launch of Twin Vew and Amber 45.
These were the largest projects sold, with Twin Vew selling 442 of its 520 apartments in the launch weekend. Median selling prices was S$1,399 psf.
At Amber 45, 86 out of 100 units were sold during the launch weekend. Median selling prices were S$2,378 psf.
Ms Christine Sun, head of research and consultancy at real estate firm OrangeTee, said, “Many developers have fast-tracked their project launches to ride on the current sales momentum. The positive buying sentiment has been fuelled by the collective sales frenzy where many buyers are rushing to buy a property now in anticipation of higher property prices”.
She estimates there could be 19,500 new units launched by June 2019.
Ms Sun expects prices to rise as the existing stock in the market is depleting and new supply will only come online in the second half of 2018.
In addition, higher land and acquisition costs are set to push up the prices at which developers are hoping to sell their units.
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Sounding a note of caution, Mr Eugene Lim, executive officer of property firm ERA, said that developers should be careful of “over-pricing”, because buyers are still price-sensitive.
The sensitivity is likely to be compounded as the variety of options available to buyers widen with many new projects to be launched in the next year.
Developers who aren’t able to read the consumer well enough may over-price their developments, leading to poor sell-through rates.
In June, Mr Lim is expecting the number of private home sales to dip due to the school holidays, but to pick up post the seasonal school holidays.
Mr Nicholas Mak, executive director of real estate investment firm ZACD Group said that developers are likely to moderate the pace of releasing their projects to take advantage of positive market sentiments.
This is because most developers would not want to go into head-on competition with fellow competitors.
Mr Mak notes that there is likely to be two new launches in the next two months, namely Stirling Residences (1,259 units) in Queenstown and Park Colonial (805 units) in the forthcoming Bidadari new town.
Tower 23 of Marina One Residences and Riverfront Residences in Hougang are also slated to be launched shortly.
Colliers, a real estate services firm, expects 12,600 new private homes to be sold in the whole of 2018, a 20% increase from 10,566 units compared to the previous year.
Mr Chris Koh, director of property firm Chris Koh International, said that market sentiments are turning, with buyers showing some hunger after having to wait on the sidelines for the last four years.
Mr Koh said, “Not only are displaced property owners looking for replacement homes after their previous residences were put up for collective sales, some who may have made a windfall from those sales might be looking to invest in more properties”.
Mr Ku Swee Yong, chief executive of International Property Advisor, said that the anticipated increase in new launches could be a response to rising interest rates.
As of 18 June, the 1 month SIBOR stands at 1.4%, the 3 month SIBOR stands at 1.52% and the 12 month SIBOR stands at 1.85%.
There has been an increase of about 100 basis points since the historical lows between 2010 and 2014.