Head of Department, Research & Consultancy

Nicholas Mak

ERA Singapore

ERA APAC Centre

450 Lorong 6 Toa Payoh

Singapore 319394Tel: (65) 6226 2000Fax: (65) 6220 0066

COMMENTARY25 May 2021

| 15 July 2021

Putting the worst of the

pandemic behindDevelopers’ sales June 2021

Putting the worst of the pandemic behindDevelopers’ sales June 2021

COMMENTARY

What happened in the private housing primary market inJune

Real estate developers in Singapore released 815 private housing units (excluding

Executive Condominium units) in June 2021, 57.9% more than the preceding month.

Over the same period, they sold 872 private residential units, slightly lower than the

895 units sold in May 2021. The marginally lower sales in June was partly due to the

lack of new major project launches and the effects of the tighter social distancing

measures of Phase 2 (Heightened Alert) which ended on 13 June 2021.

Healthy demand

Although the number of private housing units sold in June was marginally lower, the

demand is still healthy as the take-up rate, which is the ratio of the number of units

sold to the number of units released in the month, is 107.0%. As a result, the number

of unsold private housing units decreased from 13,718 units in May to 13,401 units in

the following month.

Figure 1 | Number of units launched by developers

Source: URA, ERA Research & Consultancy

COMMENTARY

Table 1 | Transaction volume of all private residential properties (excluding EC) in the

primary market

*Note: 2Q 2021 figures are preliminary

Source: URA, ERA Research & Consultancy

Private housing units

launchedPrivate housing units sold

1Q 2021 3,716 3,493

2Q 2021 (p) 2,369 3,037

What happened in 2Q 2021

Based on the preliminary figures released today, property developers launched a

total of 2,369 private housing units in the second quarter of 2021 (2Q 2021), which

was 36.2% lower than the number of homes launched in 1Q 2021. The lower launch

volume in the second quarter was not entirely due to the 4-week Phase 2

(Heightened Alert). The dwindling supply of new residential projects available for

launch also contribute to the lower launch volume.

Figure 2 | Number of units sold by developers

Source: URA, ERA Research & Consultancy

COMMENTARY

As the primary market sales is influenced by the launch volume, it is not surprising

that the number of private homes sold also slipped from 3,493 units in 1Q 2021 to

3,037 units in the following quarter. However, the 13.1% quarter-on-quarter (qoq)

decline in sales in 2Q 2021 was smaller than the 36.2% qoq fall in the number of units

launched over the same period, indicating that housing demand was still healthy, but

some buyers were probably taking more time to consider their home purchases.

Although the number of private homes (excluding EC) sold in the primary market

decreased by 13% qoq in 2Q 2021, property developers managed to sell 3,025

dwelling units in the prime CCR market, which was 22.4% more than the preceding

quarter. This could be because 5 out of 7 new launches in 2Q 2021 were located in

the CCR.

Figure 3 | Non-landed residential price indices

*Note: 2Q 2021 figures are preliminary

Source: URA, ERA Research & Consultancy

COMMENTARY

Best-selling residential projects

The best-selling residential project last month was Hyll on Holland, a freehold 319-

unit condominium located in District 10. It is rather unusual for a project in the CCR

to be the best-selling project in a given month because the best-selling project is

usually a large condo project, which is usually located in the suburban OCR (Outside

Central Region).

The current show flat of Hyll on Holland is going to close down shortly. Hence, the

developer decided to conduct a special price promotion for this project, which

attracted significant interest from homebuyers. It also showed that there were

buyers with the means to buy properties in the prime locations, they just need the

right incentives to put their money on the table. As a result, 87 units in this

development was sold at the median price of $2,387 psf in June. In the first 5 months

of 2021, the median transacted price of this project was reportedly $2,458 psf.

Table 2 | Best-selling residential projects in June 2021

*Note: 2Q 2021 figures are preliminary

Source: URA, ERA Research & Consultancy

Project name Street name Postal district

Total No. of

units in

project

No. of units

sold in June

2021

Median price

($psf) in June

2021

Hyll On

HollandHolland Road 10 319 87 $2,387

Treasure At

Tampines

Tampines

Lane18 2,203 80 $1,411

Normanton

Park

Normanton

Park5 1,862 62 $1,821

The Florence

Residences

Hougang

Avenue 219 1,410 47 $1,661

Midwood Hillview Rise 23 564 46 $1,636

The other four best-selling projects in June were located in the city fringe and

suburban areas. The size of each of these four projects was significantly large,

averaging 1,510 units each. The median transacted prices of the three best-selling

mass-market projects in the OCR ranged from $1,411 psf to $1,661 psf.

COMMENTARY

Executive Condominium market

The Executive Condominium (EC) primary market also experienced the similar issue

of fewer units launched leading to lower sales in 2Q 2021. Developers launched 413

EC units and sold 507 EC units in 2Q 2021. However, the number of launched and

unsold EC units has remained fairly stable in the past 12 months, ranging from 518

units to 726 units. This is because the supply of new EC has been stable as the

government has sold an average of 2 EC sites each year for the past five years.

Table 3 | Number of Executive Condominium units launched and sold in 1H, 2021

*Note: 2Q 2021 figures are preliminary

Source: URA, ERA Research & Consultancy

The monthly supply of new EC units will be lumpy as each EC project is usually

relatively big, averaging 563 units each, based on the past 20 EC projects launched.

When a new EC project is launched, the sales of EC units in that month will number in

the hundreds. In the subsequent months when there is no new EC project launched,

the monthly sales volume will usually hover below 100 units.

EC units launched EC units sold

1Q 2021 700 647

2Q 2021 (p) 413 507

Outlook

In the first half of this year, developers launched and sold an estimated 6,085 units

and 6,530 private housing units (excluding EC) respectively. In the second half of

2021, developers may launch and sell fewer units as their inventory of unlaunched

project is declining. Furthermore, the launch and sales activities could also slow

down during the lull periods in the Ghost Month and year-end festivities. There is also

a risk that there could be another flare up in the coronavirus pandemic locally, which

could lead to another partial lock-down, similar to the Phase 2, which could limit the

sales activities in the property market.

In a sign that the residential property market has put the worst of the pandemic

behind, property developers could sell about 11,000 to 12,000 private homes this

year, achieving the highest annual sales volume since 2013, when developers sold

14,948 private housing units. This is provided that the government does not

intervene too much in the market. After the government introduced further rounds

of cooling measures including the Total Debt Servicing Ratio (TDSR) structure in

2013, the primary market sales volume did not exceed 11,000 units annually.

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