The wave of new launches that began in earnest the second half of last year may have helped developer sales end the year on a stronger than expected note.
But views are mixed on how this year would pan out as the new launch bonanza is set to continue.
Based on preliminary estimates, for the whole of 2018, developers sold an estimated 9,264 units and launched an estimated 8,773 private residential units.
This excludes figures for executive condominiums, a private-public housing hybrid.
Following cooling measures, some analysts had predicted last year that 2018 new home sales could fall by as much as 25 per cent from the 10,566 units for the whole of 2017.
JLL senior director of research and consultancy Ong Teck Hui said sales momentum in the second half of the year increased, not withstanding the surge of buying on July 5 with the sudden launch of Riverfront Residences, Stirling Residences and Park Colonial.
As for the sizeable increase in launch volume, particularly in the second half of the year, he said: “The increased momentum of launches is partly due to an expectation of a large launch supply hitting the market in 2019, which led some developers to launch their projects and secure sales before the year ended.”
Amid no new launches and the year-end lull, 602 private homes were taken up in December, about half the 1,201 units sold in November. During the month, developers released 101 new units for sale, much lower than November’s 1,342 units launched.
Still, December’s sales tally of 602 private homes was about 40 per cent higher than the 431 units booked in the same month a year ago.
Lee Sze Teck, Huttons Asia head of research, said: “Despite no new launch in December, sales momentum of earlier launched projects continued even after their initial launch. This largely showed that developers have gotten their product mix and pricing spot on.”
Colliers International head of research Tricia Song said about 55 to 60 projects that make up over 17,000 units could be launched in 2019, though this could spill over into 2020. Some major projects include The Florence Residences and Treasure @ Tampines.
“We expect sales to be supply-led again as the pace and number of new launches continue to dictate takeup rate.” Developers could sell 9,500 to 10,000 new homes, she said.
Christine Sun, head of research and consultancy at OrangeTee & Tie, said: “The ongoing sales momentum at several new projects may indicate that the property market could be reaching equilibrium soon as prices are stabilising and more buyers are streaming back.”
She thinks the current buying momentum will continue and developers’ home sales could reach 10,000 to 11,000 units for 2019.
Sounding a more bearish note, ZACD Group executive director Nicholas Mak reckoned that home-buying demand continues to be moderated by the market cooling measures, the risk of rising interest rates, global economic uncertainty and US-China trade tensions.
“Residential developers’ sales volume in 2019 could continue to moderate to between 7,500 and 9,000 for the whole year as there is still cautious optimism and healthy underlying demand in the market,” he said.
Tighter financing requirements as well as higher financing costs in a rising interest rate environment will weigh on buyers’ minds, said Desmond Sim, head of research for Singapore and Southeast Asia for CBRE.
He expects “sales momentum for 2019 to slow down to the underlying demand levels we have witnessed from 2014 to 2016, on the back of global uncertainties and weak sentiments.”
Adapted from: The Business Times, 16 January 2019