Looking to dip your toes into the private housing market? Recent figures might just give you that extra push. According to the Urban Redevelopment Authority (URA), private home sales were up 30% in May, along with a surge in the number of new properties launched by more than 200% in the same month. With all these exciting new developments in the works, what does it mean for the private housing market?
Optimistic private housing market ahead
Not including executive condos, a total of 3,525 new private homes were sold in the first five months of the year, which was an increase of 2.6% from 3,436 units in the same period last year, as reported by the Straits Times. Compared to a slowdown in April at 444 units, an increase of nearly 214% at 1,394 private homes were released for sale in May, amounting to an increase of 32% from 1,060 units launched in the same month in the previous year.
Meanwhile, 952 units were sold in May, an increase of close to 30% from April’s 735 sold units, but a decrease of 15% from last May’s 1,122 booked units. But although nine new projects were launched by property developers in May, the majority of last month’s sales had come from earlier launches instead, i.e. 70.2% of May’s total sales were from previous launches. Perhaps expectedly, most of the sales were driven by good agent commissions from some projects.
“Sales were concentrated in projects like The Woodleigh Residences in Bidadari, mega projects like Treasure At Tampines, and some others, where developers paid good commissions of over 2 to 3 per cent. But sales languished in projects that didn’t pay as good a commission,” Savills Singapore research head Alan Cheong said.
“This shows that unsold units in previous projects are building up (but) still offer buyers opportunities. URA Realis data shows 3,491 unsold units in launched private residential projects as at the first quarter of this year, up from 1,066 units a year ago,” said JLL’s senior director of research & consultancy Ong Teck Hui.
Earlier launches still a hit with buyers
With the majority of the sales going to previous launches, the rest went to the nine new launches accounting for 29.8% of total sales in May. Two new launches stood out particularly – East Coast’s Amber Park and Changi’s Parc Komo – with their ideal locations, attractive freehold pricing, as well as project design.
Additionally, suburban projects such as Tampines’ Treasure are within the means of many entry-level buyers at median prices of between $1,340 psf and $1,497 psf. In addition to attractive agent commissions boosting its sales, one of the earlier launches, The Woodleigh Residences, also became a top seller in May when its median price was reduced to $1,823 psf from around $2,000 psf at its initial launch last November.
“Despite tighter margins, we believe this move has helped drive sales, with 74 units sold in May, versus 29 sold during its initial launch. Hence, low or slow take-up rates could encourage developers to price more conservatively against the market,” said Credit Suisse analyst Louis Chua.
Meanwhile, CBRE’s head of research for Singapore and South-east Asia Desmond Sim observed that some developers may choose to launch at lower prices for units secured in the later stages of the collective sale cycle, as well as projects still in the pipeline, assuming take-up maintained at present levels.
But when all is said and done, even as we are currently in a buyer’s market for private properties, it still pays to have a wait-and-see attitude. Before grabbing a piece of that private housing pie, there are a number of things to consider before buying your first private home that can help you secure the best housing purchase.
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