Singapore primary residential sales plummet 60.5% to 645 transactions in February

Blame it on a lack of new launches during the month.

According to Knight Frank, primary sales in the private residential market took a breather in February 2021 with 645 transactions (excluding Executive Condominiums (ECs)), a substantial fall of 60.5% or an almost 1,000-unit decline when compared to January. While new sales in January were propped up by new launches that had captured the homebuying public’s attention, such as Normanton Park and The Reef at King’s Dock, a lack of new launches resulted in the decline in transaction volume in February.

According to URA, there were only 167 new units (excluding ECs) that were launched in February, 93.6% lower and a mere fraction of the 2,600 units launched in January and the lowest number of units launched since December 2018. From the data released today, J@63, a small boutique apartment project in Lorong J Telok Kurau was the only new project to be launched, while the rest comprised new units released from existing launches.

At 167 new units, this was even lower than the number of units launched in the months of April and May 2020 when Singapore was stuck in the circuit breaker, and when all business activity practically came to a halt. In the past, whenever there was a dearth of new launches, monthly sales volumes would naturally fall.

However in February, there were almost four units sold to every unit launched (against every 1.0 to 1.7 units sold to every unit launched during the months in 2020 when the number of newly launched units fell below the number of units sold), suggesting that buyer interest remains in existing launches.

Despite the general absence of new launches, developer sales in the first two months of 2021 at 2,277 units is 42.7% higher than in the same period last year, before the threat of the COVID-19 pandemic became a serious economy-crippling national concern.

Demand continues to flow from HDB upgraders who made decent profits from their Build-To-Order (BTO) units after five years of mandatory residence transiting to mass market private homes. This group of sellers are benefitting from HDB resale buyers who have been enabled by the increased government grants in the last few years. Older Singaporeans, such as the baby boomers, who have made substantial capital gains from their homes or from enbloc sales in the past are recycling capital to their children, enabling a younger crop of homebuyers. Demand for limited units and the recovering economy have led families who have savings and are put off by waiting for Build-to-Order (BTO) units to complete, to make private property purchases.

Nevertheless, developer sales in March should pick up with the expectation of new launches such as Midtown Modern and Irwell Hil Residences in the later half of the month.