News: New private homes sales to hit up to 7,000 this year: Knight Frank

Jul 17, 2020

Despite the circuit breaker restrictions, sale activities still continued to happen in Q2 2020 and Knight Frank believes that the easing of the circuit breaker measures will improve sale activities for the remainder of 2020. 

While the enforcement of the circuit breaker measures disrupted real estate activities in Q2 2020, Knight Frank believes the progressive easing of the restrictions and resumption of economic activities will contribute to a pickup in sales activity for the rest of 2020.

In fact, Knight Frank expects this year’s new sales volumes to hit around 6,000 to 7,000 units.

But with recessionary pressures affecting all sectors of the economy, the real estate consultancy firm expects the Urban Redevelopment Authority’s (URA) non-landed price index to fall by around 5% this year, depending on the extent of economic contraction.

URA flash estimates showed that the Property Price Index (PPI) for non-landed private homes declined 0.6% quarter-on-quarter in Q2 2020 to 147.2, taking the decline for the first half of the year to 1.6%.

The quarter saw 2,253 transactions for non-landed private homes, excluding executive condominiums (ECs), despite the closure of showflats and restrictions on physical viewings for most of Q2.

Knight Frank noted that while transaction volumes fell 40.5% from the previous quarter, the sales activity indicated that “some buyers had adapted to these unprecedented conditions”.

Of the 2,253 transactions posted in Q2, around 70.6% or 1,591 were new sale transactions, while the remaining 662 were secondary sale transactions.

“New sale activity was down in April when the circuit breaker measures first kicked-in, recording 261 sales of non-landed private homes (excluding ECs). However, sales activity in the primary market improved as the quarter progressed, increasing to 455 and 875 transactions in May and June respectively as developers’ discounts encouraged buyers,” said Knight Frank.

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“Secondary sales however continued to slide, with 145 in May and 218 in June as compared to 299 in April.”

It revealed that non-landed private home prices within the Core Central Region (CCR) slipped 0.1% quarter-on-quarter in Q2, an improvement from the 2.2% quarter-on-quarter decline posted in Q1.

CCR saw non-landed transaction volumes, excluding ECs, fall 60.4% quarter-on-quarter to 381 units in Q2, after steadily increasing during the last two quarters.

Projects that launched for sale in Q2 in CCR were limited, including 15 Holland Hill and Kopar at Newton.

Opened for sale just before the circuit breaker restrictions kicked in, Kopar at Newton registered 116 transactions with average unit price at $2,275 per sq ft (psf), making it the highest volume during the quarter. The project recorded 71 transactions from 4 to 6 April alone prior to the mandatory closure of sales galleries.

Over at the Outside Central Region (OCR), non-landed private home prices held flat in Q2 after falling 0.4% quarter-on-quarter in Q1.

“While overall non-landed transaction volume (excluding EC) dipped, new sale activity sustained with 773 transactions recorded,” said Knight Frank.

“New sales were boosted by developer discounts in projects such as Treasure at Tampines and Parc Clematis, with both registering above 150 units this quarter.”

It added that a Hillion residences unit was transacted for $2.7 million or $1,032 psf, and had the highest value in the OCR in Q2. The 99-year leasehold project was completed in 2017.

Meanwhile, the Rest of the Central Region (RCR) recorded the sharpest drop in prices in Q2, with the PPI for non-landed private homes dropping 1.9% quarter-on-quarter to 149.7.

RCR saw transaction volumes for non-landed private homes, excluding ECs, fall 33.7% quarter-on-quarter to 795 units in Q2. Of these, 77.7% were new sale transactions.

“Despite the lack of new project launches, developments that were previously launched continued to sell, supporting primary sale volumes. Projects that were launched in 2018 contributed to just over 50% of new sales in Q2 2020,” said Knight Frank.

It noted that Meyer Mansion posted the highest transaction value in the RCR during the quarter, with a unit sold at almost $5.2 million or $2,475 psf.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg

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Daniel Chua
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