SINGAPORE – The number of new homes sold in June fell 13.8 per cent to 821 from the previous month’s 952 units, and analysts attributed the drop mostly to the mid-year holiday effect and the absence of mega projects launched.

In the light of the latest Singapore GDP data for the second-quarter, which was the worst showing in a decade, some analysts also point to a risk of buying sentiment souring very quickly if there is an external shock or if the economy continues to deteriorate in the coming months.

Figures released by the Urban Redevelopment Authority (URA) on Monday (July 15) showed that, compared with a year ago, new home sales last month rose 25.5 per cent from the 654 units booked in June 2018. Including ECs, developers moved 822 units.

Some 670 private homes were launched in June, down nearly 52 per cent from 1,394 in May, and down 7.7 per cent from 726 units a year ago.

Mr Ong Teck Hui, JLL’s senior director of research & consultancy, said: “The lower launches and sales in June were expected as it was the mid-year holiday period. 

“The sales data suggests that the market is stable. The drop in new home sales from May to June 2019 was much lower than the drop for the same period in 2018 (-41.7%), 2017 (-21.1%) and 2016 (-49.3%). This shows that June 2019 is not worse off than in previous years,” he said.

Mr Ong added that the tally for 1H19 estimated new private home sales at 4,348 units, 10.2 per cent higher than the 3,949 units sold in 1H18.

Ms Christine Sun, head of research & consultancy, at OrangeTee, attributed the fall in month-on-month sales in June to “a dearth of mega launches (more than 500 units).” 

But she noted that last month’s figures – 821 units – were the highest sales for June (excluding ECs) over the past six years.

There were four new projects launched in June – Sky Everton, Lattice One, Seraya Residences and Sloanne Residences – compared with nine in May.

Huttons Asia head of research Lee Sze Teck said that “despite the lower number of units launched for sale, developers sold much more than the monthly average seen in 2019. In fact, the average monthly sales have been trending higher since February.”

Mr Mak noted that demand was healthy in the suburbs or outside the central region (OCR), where the number of units launched increased by 31.2 per cent month-on-month in June, but the number of sales increased by 45.9 per cent month-on-month.

Top sellers in June were Sky Everton, which sold 134 units at a median price of $2,523 psf. Treasure at Tampines moved 70 units at $1,320 psf; Parc Botannia booked 60 units at $1,296 psf and Parc Esta 58 units at $1,690 psf.

Singapore’s job market is still healthy and the interest rate environment is benign with more expected cuts, noted Ms Christine Li, head of Singapore and South-east Asia research at Cushman and Wakefield.

“Sales momentum will continue in 2H2019 due to ample liquidity. Nevertheless, competition among new launches have heated up and developers are trying to price the projects more favourably,” she added.

While some buyers are keen to lock in purchases with new projects transacting at benchmark prices, others are holding off purchases on hopes that they will get a better deal in a softer market.

“The question is whether there will be a real recession, how deep is the recession, and whether it will adversely affect the overall investment sentiment for risky assets,” ERA Realty head of research and consultancy Nicholas Mak said.