Real estate developers released and sold more private and Executive Condominium (EC) housing units in January 2021 as the year-end festivities drew to a close. Furthermore, the concerns of more property market curbs from the government had also driven more homebuyers into the property market
The number of private housing units, excluding Executive Condominium (EC), launched for sale had increased steadily from November 2020 to January 2021 on a year-on-year basis. In January 2021, real estate developers launched 2,600 private residential units in Singapore for sale, which was 334.8% more than the same period in 2020. This was after a 264.6% year-on-year (yoy) increase in the number of units launched in December 2020.
There has been growing speculation that the government could introduce new property market cooling measures in the face of the robust homebuying demand in recent months. In January this year, both the Deputy Prime Minister and National Development Minister gave veiled warnings of more government intervention in the real estate market. The high number of housing units launched in the past month could be a respond to such warnings as developers rushed to release their unsold housing units before additional market curbs were introduced.
As more housing units were launched, the number of units sold by developers also increased. Hence, the government’s warning actually heated up the market in the short term.
Let’s take a look at the private residential property market launch volume :
|Date||Units Launched||%yoy Change|
|Date||Units SOLD||%yoy Change|
|Project Name||Property Type||Locality||Total Units||Units Sold in Jan||Median $psf|
|Parc Central Residences||Exec Condo||OCR||700||417||$1,177|
|The Reef at King’s Dock||Condo||RCR||429||221||$2,276|
One-third of the 1,862 units at Normanton Park were sold at the median price of $1,763 psf in January. Over at Parc Central Residences and The Reef at King’s Dock, over half of the total number of units in each development were sold in January at the median prices of $1,177 psf and $2,276 psf , respectively.
The impressive rate of sales in these three new launches was partly due to lack of new privateresidential launches in each respective location in recent years. In addition, the threat of more property market cooling measures had also contributed to the urgency among some buyers to clinch their home purchases.
As private housing supply outpaced demand in recent months, the take-up rate as measured by the ratio of units sold to the number of units launched in each month had remained below parity in November 2020 to January 2021. As a result, the number of private housing units launched and unsold had grown steadily from a trough of 4,833 units in July 2020 to 7,226 units last month.
|Date||Private Housing Take-Up Rate|
The slower absorption rate indicates that the local private residential property market is not overheated. In addition, the private housing price index increased 2.2% yoy in 2020, a fraction of the 9.1% y-o-y price expansion in 2Q 2018 before the authorities introduced the most recent cooling measures in July 2018.
If the government were to introduce more cooling measures this year to curb housing demand, it would heighten the risk of an oversupply of private and EC housing units, which in turn would lead to negative impact on other sectors in the economy, such as the banking, finance and construction industries.