Developer sales of private homes, ECs hit four-year high

Developer sales of private homes and executive condominiums (ECs) hit the highest in four years in 2017.

There were 14,707 units moved, according to early estimates, 23 per cent higher than the 11,971 units sold in 2016.

These included 10,682 private residential units, 34 per cent more than the 7,972 units sold in 2016. Sales of ECs held steady at around 4,000 last year, according to data compiled by the Urban Redevelopment Authority (URA).

The encouraging sales volume and the pickup in home prices in the second half of 2017 signalled that the private residential market has turned a corner and should continue to recover this year, analysts said.

About 25 major private non-landed projects with the potential to yield 15,000 to 16,000 units (excluding ECs) could be put on the market this year.

The 2017 sales tally could have been higher, but several developers held back launches in anticipation of an expected upturn in prices this year.

Developers have pared down unsold inventories in older existing projects, with most of the top 20 sellers last month already more than 80 per cent sold.

As such, we could see high sales volumes in 2018 as the launch pipeline expands due to expected launches from the en bloc market, government land sale sites and relaunches from existing projects,.

Consultants expect around 13,000 to 14,000 units sold by developers in 2018.

It is estimated that 9,000 to 10,000 private residential units could be launched this year and, together with about 2,000 units unsold in launched projects, should provide a healthy level of supply.

The diverse risk appetite that developers have demonstrated in their land bids have drawn varied projections from consultants on the potential price increase this year – from 3 per cent to as high as 15 per cent, following a 1 per cent uptick last year.

However, if launches are slowed deliberately and pricing becomes over-optimistic, sales could be less brisk than anticipated.

There is also the risk of rising interest rates that could keep buying demand in check.

If interest rates are raised gradually, that will not hurt the market but it will dampen over-exuberance among buyers who are overly optimistic.

Developers that sold the most units last year were Qingjian Realty, Frasers Centrepoint and City Developments (CDL), each clocking sales of over 1,000 units.

The URA’s estimates also show that developers sold 531 private residential units and ECs in the traditionally slow month of December. This was 43 per cent below what they sold in November and 8 per cent less than in December 2016.

The first project to come onstream this year is CDL’s New Futura, a 124-unit freehold development in Leonie Hill in District 9. Sales start on Thursday through appointment-only viewing, with prices starting from $3.8 million for a two-bedroom unit of 1,098 sq ft, according to agents.

Also in the pipeline is the only new EC project this year – Rivercove Residences, jointly developed by Hoi Hup Realty and Sunway Developments. It is likely to launch in March. Twin View at West Coast Vale by China Construction (South Pacific) Developments is expected to be launched in March or April.

Adapted from: The Straits Times, 16 January 2018