Property developers in Singapore sold 2,603 new private homes in the fourth quarter last year, about 26 per cent lower than the 3,517 units sold in the previous quarter, though prices increased at a greater pace.
The full-year tally for developers’ new home sales stood at 9,982 units for 2020, inching up from 9,912 units in 2019. This confirmed previous expectations that 2020 new home sales could top 2019’s.
These final figures – released by the Urban Redevelopment Authority (URA) on Friday – exclude executive condominium (EC) units, which are a public-private housing hybrid.
Christine Sun, OrangeTee & Tie’s head of research and analytics, described last year’s private home demand as “surprisingly vibrant”, against the backdrop of Covid-19 lockdowns and strict travel restrictions.
On the EC front, developers made fewer sales in the fourth quarter (133 units) than in the third quarter (164 units) last year, and did not launch any new EC units for sale in both quarters.
For the whole of 2020, developers sold 958 EC units, almost double the 505 sold in the year prior.
Developers launched 1,044 EC units for sale last year, 27.3 per cent more than the 820 units launched in 2019.
Meanwhile, overall prices of both landed and non-landed private residential properties rose 2.1 per cent during the October-December period, a bigger increase than when prices edged up 0.8 per cent in the previous quarter. OrangeTee’s Ms Sun said the Q4 figure marked the steepest quarterly increase in over two years.
This was mainly driven by non-landed properties located in the rest of central region (RCR) and core central region (CCR). Prices of non-landed homes in the RCR or city fringe sped up their uptrend, rising by 4.4 per cent compared with the 2.5 per cent increase in the July-September period.
In the CCR, these upmarket non-landed homes’ prices climbed 3.2 per cent in Q4, reversing the 3.8 per cent decline in Q3.
Non-landed homes in the outside central region (OCR) or suburbs registered a 1.8 per cent increase in prices, slightly faster than the 1.7 per cent gain in the previous quarter.
Ms Sun said the price growth was expected, as many projects revised their selling prices upwards last quarter. These projects included Fourth Avenue Residences, Kopar at Newton, The M, The Avenir, Leedon Green, Royalgreen, Treasure at Tampines, The Garden Residences, Jadescape, Forett at Bukit Timah, Stirling Residences and The Florence Residences, she noted.
For the whole of last year, non-landed homes’ overall prices grew 2.2 per cent, slower than the 2.7 per cent rise in 2019.
Meanwhile, landed homes became cheaper on average in the fourth quarter, with prices falling by 1.6 per cent versus the 3.7 per cent increase in the quarter prior. For 2020, landed properties’ prices rose by 1.2 per cent.
In 2020, certain factors made it more favourable for buyers who had been struggling to enter the market for several years, according to Ms Sun.
“Attractive offers were dangled by developers while sellers eager to offload units were more open to price negotiations. Record-low interest rates also lowered the hurdle of property ownership and encouraged undecided buyers to ‘get off the fence’,” she noted.
The wealthy’s income growth during the Covid-19 pandemic kept sales of luxury homes resilient. “With the exception of 2017, more luxury homes were sold in 2020 than the prevailing five years,” said Ms Sun.
Supply in the pipeline – that is, new development or redevelopment projects with planning approvals – continued to dwindle.
Uncompleted private residential units, excluding ECs, in the pipeline totalled 49,307 at end-December, shrinking from the 50,369 units as at end-September. Of these, 24,296 units remained unsold as at end-December, down from the 26,483 unsold in the previous quarter.
In EC projects, 3,476 units were in the pipeline, of which 2,130 remained unsold by the end of last year.
That means there is a total of 26,426 units, including ECs, with planning approvals that were still unsold at end-December, declining from 28,727 in the previous quarter and 32,272 a year ago.
Ms Sun wrote that this year, the market may swing back in favour of sellers as housing stock is depleting amid robust demand and a drastic decline in land sales in recent years. “The oversupply risk of our private residential market may be easing soon”, following a healthy net absorption of new homes over the last three years.
Aside from the unsold units with planning approval, there is also a potential supply of some 4,700 units including ECs from government land sales (GLS) sites that have not been granted planning approval yet, URA said.
The authority added that the Singapore government will continue to monitor economic and property market conditions “closely” and adjust the supply of future GLS programmes where necessary, to ensure it remains adequate in meeting demand.
Earlier this week, Deputy Prime Minister Heng Swee Keat said the government is paying “close attention” to the local real estate market “to ensure that it remains stable”. “We do not want to see the property market run ahead of the underlying economic fundamentals”.