Private new sales segment remains the anchor of the residential property market.
Private New Home Sales Volume
3,281 number of private new homes were sold for the third quarter of 2019. This demonstrates a 39.6% (q-o-q) rise in the number of units sold as compared to the previous quarter, which had 2,350 units transacted.
Chief Executive Officer of PropNex Realty, Mr Ismail Gafoor highlighted that “The consistent performance of the new sales segment has provided the added boost for the private property market. This has been achieved due to increase in number of new project launches in the first 9 months, with rightly priced projects garnering the interest of buyers and investors. “
Mr.Ismail further stated that “Hence, we are confident that the new sales segment will cross the 9,000 unit-mark for this year. Moving forward, with the huge stock of 31,948 unsold units and the spate of new launches that is expected, we believe that the new sales segment will continue to outperform, likely to reach 10,000 new sales in 2020.”
Private Resale Volume
2,378 private resale transactions took place in the third quarter of 2019, a 0.3% (Q-o-Q) increase as compared to the second quarter of 2019, which recorded 2,371 private resale transaction.
Mr. Ismail mentioned that “Despite the silver lining in the new sales segment, the underlying slowdown of the private property market, can be observed in the resale volume of transactions. However, we believe that the private resale transactions will be in the range of 8,500 to 9,000 units this year. With the weakened prices of resale properties as compared to the new sales segment and the estimated of over 25,000 HDB resale flats reaching its MOP next year, we believe that the resale market sentiment will remain positive and we are expecting an estimated 10,000 private resale transactions in 2020.”
Private Home Prices
Private home prices for the third quarter, represented a price change of 1.3% quarter-on-quarter (Q-o-Q).
Mr. Ismail highlighted that “We are certain that the year will end on a strong note, with price index reaching 3%. While, for the overall private residential transactions (new sales, resale and sub-sales), we are anticipating that it will be likely be around 18,000 transactions for the whole year. An 18.7% drop as compared to last year, which recorded a total of 22,139 transactions.”
A total of 6,264 HDB resale transactions occurred in the third quarter of 2019, a 0.2% (Q-o-Q) drop as compared to the second quarter of 2019, which recorded 6,276 HDB resale transactions.
Mr. Ismail stated that “The HDB 3Q19 resale volume is lower than expected and the dip in sales is likely due to the announcement on September 10 for the New Enhanced CPF housing grant (EHG). Buyers are weighing their options and opportunities before committing to purchase. “
However, Mr. Ismail expects the overall HDB resale volume to be similar to last year’s performance of 23,000. Looking ahead, with the implementation of the EHG, we can expect more newly-wed couples to be opting for resale flats instead of BTO flats. Hence, we can anticipate that the HDB resale transaction volume is likely be 25,000 in 2020.
The HDB resale flat prices had a price change of 0.1% in the third quarter of 2019. For the first 9 months, the overall HDB resale price index saw a -0.4%. Mr. Ismail highlighted that after 2012, the HDB resale price growth has been in the negative range. We are expecting that trend to continue and remaining flat for the rest of this year. However, with greater demand for resale flats, we are projecting a positive growth in prices, in the tune of 1 to 2% for the year 2020.