SINGAPORE — Private home sales soared in November compared with the previous month, mainly because of the sheer number of new launches that developers unloaded onto the market before the year-end holiday season.
With 1,198 units sold excluding executive condominiums, it was the busiest month for new private home sales this year — aside from July, when buyers snapped up 1,724 units in a frenzy before the last round of cooling measures kicked in.
In July, the Additional Buyer’s Stamp Duty was went up by 5 percentage points for individuals and 10 percentage points for developers. The loan-to-value limits were also tightened.
Analysts said that healthy sales figures in October, coupled with developers wanting to avoid the traditionally quiet month of December, likely led to the release of a bumper crop of new units in November.
Dramatic rise in November’s private home sales
146 per cent increase in private home sales from October to November (excluding executive condominiums).
Large numbers sold due to greater supply in November, with 1,341 units from seven new projects launched.
It marked the highest number of new units launched so far this year, excluding July, when an exceptionally high number of 2,239 units in three new projects were released the night before cooling measures took effect.
In October, developers launched only 202 units but sold 487, signalling that existing private residential projects were still selling well. Mr Lee Sze Teck, head of research for property agency Huttons Asia, said: “This gave developers the confidence to push out more units in November.”
Ms Christine Sun, head of research and consultancy of property firm OrangeTee, said that buyers, many of whom had been waiting to see if prices of private property would fall, realised that they did not move much even after July's round of property curbs. “If they need to buy, they need to buy,” she added.
Push factor 2: Developers avoiding December
With December typically being a slow month for home sales, analysts said that developers generally tend to avoid launching new projects that month.
Urban Redevelopment Authority data shows that over the past six years, the number of new launches in November, excluding executive condominiums, has consistently been higher than that in December.
Mr Desmond Sim, head of research for Singapore and South-east Asia at real estate consultancy CBRE, said that the spectre of rising interest rates is another impetus for developers to push out whatever projects they can before the year end.
“Next year presents new challenges,” Mr Sim said, and this includes a greater supply of property units planned for 2019, arising from all the sites developers acquired through the en-bloc frenzy in 2017 and the first half of 2018.
Number of new units launched
Outlook for 2019
Developers will likely continue to phase out their new launches in 2019.
Even though there are up to 19,000 units that are ready for launch, analysts expect the number of new units that will be launched next year to hover between 12,000 and 14,000 units, with the rest of the supply to spill over into 2020.
This may be a strategy to avert a situation of over-supply in 2019, which has been a major concern raised among industry players, Ms Sun from OrangeTee said.
Analysts also expect the number of private home sales next year to hit between 9,500 and 11,500 units.
This is higher than the 9,000 new private homes expected to have been sold by the end of 2018.
Ms Tricia Song, head of research for Singapore at property consultancy Colliers International, said that this is mainly because of “a potentially larger and varied launch pipeline and gradual market acceptance of the new measures in 2019”.