the first three months of 2019, developers seemed to be testing the waters to
understand homebuyers’ mindset with respect to the July 2018 measures against
the backdrop of a clouded economic outlook.
developers launched 2,989 new homes for sale in Q1 2019, some 1,838 units were
sold. This mirrored the take-up of 1,836 units in the previous quarter, a sign
that there is demand but buyers are still sizing up the market.
private residential price index fell by 0.7% q-o-q in Q1 2019, a stronger
correction than the 0.1% marginal drop in Q4 2018. While non-landed home prices
fell by 1.1% q-o-q, landed home prices reversed the trend with a gain of the
decline in the price index could be attributed to the 3.0% decline in the price
index of the Core Central Region (CCR) as well as the 0.7% decline in the price
index of the Rest of Central Region (RCR). The price index for Outside Central
Region (OCR) remained healthy with a marginal upside of 0.2% q-o-q.
in CCR were probably due to a relatively fewer luxury transactions in Q1
compared to the previous quarter. In the RCR, the strong supply in the market
necessitated competitive pricing by developers in order to attract home buyers.
As for OCR, by pricing the bulk of the units below $1.2 mil – the threshold for
mass market projects – developers were able to move sales through compact
sizing of units and product differentiation without reducing price.
offered some 13 new projects for sale in Q1 2019. The more outstanding projects
by project size were The Florence Residences and Treasure At Tampines, which
were formerly HUDC developments. By location, there were five new projects in
the prime CCR: Fourth Avenue Residences, RV Altitude, Fyve
Derbyshire (71 units), Boulevard 88 and 35 Gilstead (70 units).
availability of many choices coupled with the hesitant stance taken by
homebuyers resulted in slower sales. However, the announcement of the Cross
Island Line (CRL) at end-January was a boon for projects in OCR. Phase 1 will
comprise 12 stations passing through Ang Mo Kio, Hougang, Tampines, Pasir Ris and
Changi Aviation Park. Caveat data for February and March showed that over 300
units from Affinity At Serangoon, The Florence Residences, The Garden
Residences and Riverfront Residences were sold mainly because of their
proximity to the proposed MRT stations along the CRL.
secondary market saw a similar sales volume of with new home sales in Q1 2019.
With 1,858 transactions, it is only 20 units more than the 1,838 new homes
sold. This is about 6% lower than the 1,971 resale transactions in Q4 2018.
Resale homes appeal to homebuyers because they are ready for immediate
occupation. Moreover, due to age and quality, they are generally priced lower
than new developments in the same neighbourhood.
Some support for resale homes also came from the beneficiaries of successful
collective sales in 2018 who need replacement homes.
luxury market also slowed down in Q1 2019, with only seven bungalows sales
within Good Class Bungalows (GCB) Areas and 67 luxury apartments sales. There
was no known bungalow deals in Sentosa Cove. Back in Q4 2018, there were 12
bungalow sales in the GCB Areas and four in Sentosa Cove, and 77 luxury
were a few notable luxury transactions. A GCB at Jervois Hill was sold at $30.88 mil and another
at Ewart Park was sold at $30 mil. They were the most expensive luxury deals in
Q1 2019. As for the 67 luxury apartments sold, 19 units were from Boulevard 88
and 13 units from South Beach Residences. By price range, 55 units cost between
$5 mil and $10 mil each while 12 units cost above $10 mil each, including a
penthouse in Boulevard 88 that was sold at $28 mil ($4,927 psf).
the Q1 2019 luxury volume was thinner than the preceding quarters, the market
was fairly strong based on the high-value transactions that took place. Unlike the rest of the market which is more
budget-conscious, luxury home buyers are always on the look out for good
developments for investment and capital preservation.
the residential market was largely supported by the domestic market in Q1 2019
with 80% of the purchases by Singaporeans, 15% by PRs and 5% by foreigners.
Rental market & vacancy
good news from the rental market brought some relief to residential market: the
rental index rose by 1.0% q-o-q in Q1 2019, after a fall of 1.0% in Q4 2018. The uptick was jointly
contributed by a 0.2% growth in the rents of landed homes and a 1.1% growth in
non-landed homes in Q1 2019. Both price indices recorded a a
q-o-q decline of 2.1% and 0.8% respectively in Q4 2018.
locality, the OCR rental index showed the largest rise of 1.7% q-o-q, followed
by a 1.6% rise in the CCR rental index. This could be attributed to a shrinking
supply of rental apartments following the sale of several apartment
developments in these locations for the purpose of redevelopment. Rents were
given a boost as supply tightened. On the other hand, the RCR rental index fell
for the second consecutive quarter by 0.3% q-o-q. Pressure on rents could have
come from fresh supply in newly completed condos in H2 2018.
new homes were completed in Q1 2019. Some of the new projects completed
(1,390 units), The Clement Canopy (505 units), Roots @ Transit (31 units) and
38 Jervois (27
There were 23,357 vacant homes at end-March, down from 23,596 units three moths ago. Against a total residential stock of 370,944 homes, this represents 6.3%. Going forward, this reducing trend of vacant units is likely to continue as fewer new homes will be completed in 2019 (8,926 units) and 2020 (4,231 units).Thereafter, vacant units would rise again as projected completions will rise steeply with the bumper of new projects under construction from 2017 onwards.
Supply in the pipeline
to URA, the total supply of uncompleted homes was 53,284 units at end-March.
Major new projects which obtained approvals for development in Q1 2019 were the
ones at former Pearl Bank (776 units), former Tulip Garden (672 units), Toh
Tuck Road (669 units), Jiak Kim
Street (535 units), One Holland Village (559 units) and Dairy Farm Residences
the 53,284 units, 16,445 units (31%) have been sold by end-March. The remaining
36,839 unsold units comprised 20,919 units (57%) from projects that were either
launched or not launched yet and 15,920 units (43%) from projects that did not
have the prerequisites for sale.
Private land sales via the collective effort of building owners have ground to a halt by end-2018 following last July’s measures. Even though several sites were reoffered in Q1 2019, developers did not bite because firstly, the asking price was still very high and secondly, they have to sell all the units within five years of acquiring the site or else be slapped with a 25% ABSD plus interest. For now, government land sales (GLS) remains the only source of new development sites.
GLS sites which could yield over 1,700 units were awarded in Q1: a mixed use
site including community spaces at Pasir Ris
Central, a residential site at Kampong Java Road and an executive condominium
site at Tampines Avenue 10. Tenders for
another two sites were closed but they were not yet awarded by end-March.
Winter is coming?
2019 will be a watershed quarter as the world awaits the outcome of Brexit and
the US-China trade negotiations. These external factors will impact the
Singapore economy and affect market sentiment, which will in turn affect the
far, developers have faced much difficulty in selling their new projects and
the unsold inventory is building up. Given the current tax regime and the large
supply pipeline, home buyers will be very selective. It is difficult to tell
where the market is heading for the rest of the year.
Looking at the projects which developers have lined up, there should be some exciting new launches in the coming months. Some of these are Avenue South Residence at Silat Avenue, Riviere at Jiak KimStreet, Midtown Bay at Beach Road and Eden at Draycott Park. These projects could garner a better response than those in Q1 if market sentiments improve. A stronger demand will lend support to home prices and we can even expect a modest upside in prices in H2 2019.
Singapore residential market will remain resilient, as proven in the past. The
various measures put in place by the government are meant to ensure a more
stable market with sustainable price growth. This market resilience is why
high-net-worth investors are still attracted to Singapore.