Analysts expect the sales momentum in December to spill over to January 2021. However it is anticipated that while demand for new homes may remain high, the supply of new launches may decline this year. Image: Clavon, whose launch in December sold 473 units
Developers in Singapore sold 1,217 units new private homes in December, up 57.2% from November and 126.2% over the same period in 2019, making it the highest December sales since 2012.
Including executive condominiums (ECs), new home sales jumped 53.9% month-on-month.
Lee Sze Teck, Director of Research at Huttons Asia, attributed the exceptional performance “to the outstanding sales notched at Clavon where 473 units were sold”.
“An expected rebound in economic growth in 2021, arrival of vaccines for COVID-19 and the inability to travel because of COVID-19 contributed partly to the sales performance in December as well,” he said.
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The Outside of Central Region accounted for 75.9% of the total new home sales, while the Rest of Central Region and Core Central Region accounted for 19.1% and 4.9%, respectively.
Lee expects the sales momentum in December to spill over to January 2021, possibly maintaining sales volume at about 1,000 units.
“If that happens, it will be the highest January sale volume since 2013,” he said.
But while demand for homes remains high, Christine Sun, Senior Vice President of Research & Analytics at OrangeTee & Tie, expects supply to decline this year.
“The number of planned launches may decrease this year as many mega projects have been launched over the past three years. New land supply in the suburban and city-fringe areas has dipped very low since the end of the last collective sales cycle. Government land sales have also been moderated over the past few years,” she said.
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She noted that the imbalance between supply and demand may keep home prices firm and even rising in some areas where new supply is limited.
In fact, prices at many recent launches have already been on the rise last year despite the macroeconomic uncertainties and the pandemic.
With this, she expects new home prices “to move higher this year, possibly by 2% to 5%.”
“The total number of new home sales, excluding EC, is 10,024 units based on the flash estimates. The final figure could be lower when aborted units are accounted in the final figures released in the Q4 2020 URA real estate statistics data,” added Sun.
“Therefore, the total number of new home sales could be on par with the 9,912 units sold in 2019 and above the 8,795 units sold in 2018.”
For this year, Sun expects new home sales, excluding ECs, to stand between 9,000 and 10,000 units.