NEW private home sales in Singapore jumped 74.7 per cent to 484 units in May from 277 units in April as stay-home buyers zoomed to their dream home.
Despite a full month of “circuit breaker” amid a relentless barrage of gloomy layoffs and wage cuts news, buyers were not deterred as they picked more affordable homes, according to Christine Sun, OrangeTee & Tie, head of research and consultancy.
Including executive condominiums (EC) – a public-private hybrid – developers sold 509 units in May, up 73.7 per cent from 293 units in April, said Ms Sun who crunched URA Realis data.
Over 90 per cent of sales in May were in the mass market segment – outside central region (OCR) and rest of central region (RCR), reversing what happened in April when more buyers plumbed for expensive homes in the core central region (CCR).
The number of posh homes sold in CCR plunged to 41 in May versus 102 in April.
“Sales were higher in OCR and RCR possibly because some investors have decided to enter the market after having read reports that wealthy investors are streaming into Singapore’s market lately and that the price quantum of homes in OCR and RCR are more affordable for these buyers,” said Ms Sun.
To be sure May’s 484 sales does not mean the market is anywhere near recovery or back to normal. In 2019 developers sold 9,912 new homes.
Developers were expected to launch between 40 and 50 new projects, to date it’s been 12.
Zoom presentations plus virtual tours in May saw mainly lower-priced units sold as buyers find it difficult to cough up several million dollars without actually getting a physical feel, say agents.
According to Leonard Tay, head of research, Knight Frank Singapore, it could be that many of these new home buyers who sealed the deal in May had already been to the show flats prior to the “circuit breaker”, and weeks thereafter of staying at home helped in some measure towards a decision-making purchase.
“It could be that other buyers were confident enough to make a purchase with only the aid of online visuals and information. Regardless of the reasons, homebuyers have exhibited a degree of adjustment and adaptation to the prevailing circumstances, in a time of Covid-19,” he said.
One agent who sold a resale S$1.2 million three-bedroom freehold flat in the Farrer Park area recently following a video tour of the 920 square feet unit said it’s “not difficult for buyers to commit at that price”. “The higher the quantum, the harder it is to sell,” he said.
Some buyers were already contemplating purchase before the “circuit breaker”, said Ong Choon Fah, chief executive of Edmund Tie & Company (SEA).
“With the CB (“circuit breaker”), some developers began offering star buys with higher discounts for selected units and this attracted interests. Some developers also offer higher commission to agents who then focused on pushing sales in these developments,” she said.
On buyers’ decision to commit during a recession, Ms Ong said buyers are taking a long-term approach to their property investment.
So properties which are in a good location, well thought-out design that suits buyers’ lifestyles and budgets, and established developers are in favour.
“Parents also help to chip in. The low interest rate is another conducive factor. Owner-occupiers will think long-term and many have waited for a long time to buy their dream homes,” she said.
“Then there are those who are buying for their children and grandchildren as part of inheritance. That cost of construction will increase has also lend support to prices, nudging them to buy,” said Ms Ong.
The most popular price range (65.9 per cent) was between S$1 million and S$2 million for the new private homes (excluding EC) sold in May 2020, said Ms Sun. Another 17.4 per cent were sold between S$800,000 and below S$1 million.
There was probably greater fear and paranoia when the “circuit breaker” began on April 7, said Stuart Chng, partner at property investment blog Stacked Homes.
“By May, life resumed somewhat and people who needed to buy… would do so,” he said.
Discounts offered by developers also helped. At some of the top selling projects, discounts dangled ranged from 1 per cent to 4 per cent, from pre-pandemic prices.
Treasure at Tampines offered discounts ranging from S$3,000 to S$10,000. At the higher-priced projects, such as Kopar at Newton, the prices were 8-10 per cent lower than what it would have been because it was launched in March during the pandemic, noted Mr Chng.
It is a bit counter-intuitive but Covid-19 actually jolted some buyers to actively plan for their future, and properties were preferred as safer and stable assets, said Lee Sze Teck, Huttons Asia, director (research).
“The uncertainties over income and employment were a wake-up call that the road to financial freedom lies elsewhere,” said Mr Lee. Upgraders and first-timer buyers are likely to have formed the bulk of local buyers, he said.
On why April saw a high number of luxury sales of 102, it was mainly driven by the 83 units at Kopar at Newton, noted Ms Sun.
This is one of the latest launches in CCR, of which sales volume typically rises during the initial launch phase, said Ms Sun. The project was launched in March but many deals were closed in April.
No major luxury new projects were launched in May, she said.
In May, of the 41 private homes sold in CCR, 16 were at Kopar at Newton. This means that 25 luxury private homes were sold in the other projects in CCR. This included seven units each in Fourth Avenue Residences and Martin Modern sold during the “circuit-breaker” period.
“So technically, the number of luxury home sales (excluding Kopar at Newton) did not fall but rose in May as well,” she said.
The top selling projects in May were Treasure at Tampines (56), Parc Clematis (55), The Florence Residences (54) and Parc Esta (45).