COMMENTARY An Improvement over the Circuit Breaker - | 15 Jun 2021 - Amazon AWS

COMMENTARY                               25 May 2021

Nicholas Mak
                         | 15 Jun 2021
Head of Department, Research & Consultancy

An Improvement over the
ERA Singapore

Circuit Breaker
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An Improvement over the Circuit Breaker
Residential property primary market sales in May 2021
Introduction
The new Covid restrictions during Phase 2 (Heightened Alert) caused residential
property developers’ sales to contract in May 2021. Based on the latest sales figures
released by the government today, real estate developers sold 891 private housing
units, excluding Executive Condominium (EC) in May 2021, 29.7% lower than the
1,268 units sold in the preceding month.

The lower sales volume was also partly due to the lower number of units launched in
May. Developers released 514 private housing units for sale last month, which was
half of the number of units released in April 2021. Most of the units launched last
month was released in the first two weeks of May, before the start of tighter Covid-19
restrictions.

Improvement over the Circuit Breaker
During the Circuit Breaker implemented in April and May 2020, developers sold a
total of 764 private housing units in that two months, which was fewer than the 891
units sold last month. The stronger property sales last month was partly because the
safety measures during Phase 2 were not as restrictive as during the Circuit Breaker.
For example, residential show flats were allowed to be open during Phase 2
(Heightened Alert).

Figure 1 | Number of new homes sold by developers (including EC)

Source: URA
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As the Covid-19 pandemic has been with us for more than a year, homebuyers are
now more comfortable with the new normal, which includes virtual online viewing of
properties. Therefore, the Phase 2 tightening of safety measures had less negative
impact on the private residential property sales.

Residential launches
Three new residential projects were launched in the first two weeks of last month,
including a EC project called Provence Residence. Despite the implementation of the
tighter Covid restrictions, about 55% of the 413-unit Provence Residence was sold
last month at the median price of $1,155 psf, illustrating the strong demand for mass-
market condominiums.

Since the launch of 640-unit Clavon and the 660-unit Ki Residences At Brookvale in
last December, there was no other major mass-market non-EC project in the Outside
Central Region (OCR) launched for sale. Hence, some of the mass-market housing
demand has spilled over to the new EC projects.

At the other end of the housing market spectrum, Park Nova, a 54-unit freehold
luxury condominium at Tomlinson Road in District 10 was also launched last month at
the transacted median price of $5,000 psf. The most expensive unit in absolute
quantum sold in this project last month was a 5,899 sq ft penthouse on the 20th
storey, at $34,438,000. It also achieved the highest price in terms of unit rate at
$5,838 psf.

In an example that this pandemic has little to no negative impact on the super-rich,
twelve units in Park Nova was sold in May at a total value of $185,368,000. The
cheapest unit in Park Nova sold last month was transacted at $6.8 million or $4,742
psf.

Table 1 | List of new launches in May 2021

                                                            No. of units   Median price
    Name of          Street                  Total no. of
                                 Locality                   sold in May    in May 2021
    project          name                       units
                                                               2021           ($psf)

   Provence
                   Canberra
   Residence                       OCR           413            229           $1,155
                   Crescent
     (EC)
                    Bernam
  One Bernam                       CCR           351            82            $2,471
                     Street
                   Tomlinson
   Park Nova                       CCR           54             12           $5,006
                     Road

Source: URA, ERA Research & Consultancy
                                                            COMMENTARY

The best-selling residential project last month was Provence Residence, the 413-unit
EC development located at Canberra Crescent. Similar to the previous EC project
launched in the Canberra housing estate, this new EC project also received warm
response from buyers. About 55% of the total number of units in Provence Residence
were sold within the month of launch despite the new Covid-19 measures.

Outlook
The homebuying momentum is likely to pick up after Phase 2 is lifted in mid-June.
Developers did not launch any projects during the 4-week partial lock-down as the
safe distancing measures of Phase 2 would limit the size of the homebuying crowd at
the show flats.

A few residential projects are expected to be launched in June to August. Among the
upcoming launches in the Outside Central Region (OCR) is the mixed-use
development called Pasir Ris 8 with 487 units. It is likely to be highly anticipated as it
its conveniently linked to a retail mall and the Pasir Ris MRT station. Another EC
project named Park Greenwich with 496 EC units will also be launched, probably in
3Q 2021.

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