SALES volumes for new private homes appear to have tumbled sharply in April as developers were forced to shutter sales galleries and prospective buyers stayed home, while the extended circuit breaker could spell a poorer performance in May.

As at May 12, data from the Urban Redevelopment Authority's (URA) Realis showed there were 277 new sales transactions of private homes, excluding executive condominiums (ECs), slumping 62 per cent year-on-year. Including ECs, which are a private-public hybrid, there were 293 new homes sold in April.

The URA is due to release the total number of new private homes sold in April on Friday, which incorporates the option-to-purchase (OTP) issued by developers to buyers and makes adjustments for lapsed OTPs. Thus, the official data released Friday could differ from volumes as at May 12.

According to Huttons Asia's director of research Lee Sze Teck, around two thirds of the transactions in April took place before the circuit breaker kicked in on April 7. "It could be due to buyers holding back for the circuit breaker to be lifted in May - which did not happen - or their preference to see the physical units before committing," he said.

Nicholas Mak, head of research & consultancy for ERA Realty, added: "Moreover, economic headwinds from the Covid-19 outbreak also dampened housing demand."

Tricia Song, head of research for Singapore at Colliers International, noted that over 90 units were sold after April 7 as there is a two-week grace period for options to be exercised. She added: "Some transactions could also have happened after the circuit breaker kicked in as buyers have seen the showflats before the circuit breaker and made the decision after April 7." 

While developers have been increasingly turning to technology to market their projects to prospective buyers during the circuit breaker, analysts say that buyers are likely to adopt a wait-and-see approach when it comes to hefty purchases such as property.

"While virtual showflats have seen increased interest from potential buyers, not many actual sales have materialised as local buyers still prefer to see and feel the actual size, layout and finishes of the unit," Ms Song went on to say.

But while the transaction volume was low in April, it is still higher than some months during the 2008/2009 Global Financial Crisis where new home sales plunged well below 200 units, pointed out Ong Teck Hui, senior director (research & consultancy) at JLL.

The best selling projects in April were Kopar at Newton (83 units), Treasure at Tampines (28 units), Riverfront Residences (17 units) and JadeScape (12 units).

According to some analysts, 15 Holland Hill was the only launch last month before the circuit breaker commenced. Data from Realis shows that one unit from the project was purchased on April 2.

Drilling down by region, OrangeTee & Tie's head of research & consultancy Christine Sun noted there was a higher proportion of new homes sold in the Core Central Region (CCR) in April at 36.8 per cent, vis-a-vis March where the proportion stood at 6.8 per cent.

By absolute figures, the number of units sold in the CCR in April climbed to 102 units, more than doubling from 45 units in March, Ms Sun went on to highlight, with demand largely stemming from projects Kopar at Newton and The M.

"It is encouraging to see sales still going strong for luxury homes," she said. "This may indicate that despite the pandemic, Singapore remains an attractive investment destination to wealthy investors."

Meanwhile, with the circuit breaker extended until June 1, May could bring another month of sluggish sales for new private homes, especially considering that the bulk of April's transactions took place even before the circuit breaker kicked in.

Looking ahead, there are unlikely to be any new project launches in June, reckons Mr Lee, adding however that developers could be encouraged to launch in July ahead of the lunar seventh month in August should June bring firm demand.

JLL's Mr Ong expects developers may take a cautious stance when it comes to launching new projects, while the government's recent move to extend the additional buyer's stamp duty (ABSD) deadline by six months takes some of the heat off them.

Mr Ong said: "The continuation of sales in April, albeit at a low volume, suggests that there are still buyers in the market despite the current crisis. If Covid-19 is under better control and show flats reopen, we can expect monthly sales of new private homes to improve, although the recession is likely to impact sales performance."

Still, JLL projects that total transaction volumes of private homes this year could slump by 40-50 per cent from 2019's tally of 9,912 units.

Mr Mak reckons projects which could launch in June or July include Cairnhill 16, Forett@Bukit Timah, Hyll on Holland and Verdale.

He added: "Some developers will keep their options open. They will want to gauge demand for their project first before deciding. It is hard to do that during the circuit breaker." 

Even when the circuit breaker is eventually lifted, safe distancing measures will likely remain in place - which will temper crowds at showflats - while the economic environment could affect buyer sentiment.

For the year as a whole, Ms Song projects that the sale of new homes could drop by 20 per cent to 8,000 units, and expects developers may trim prices by 3-5 per cent. She said: "With about 2,300 units sold year-to-end April, we assume there will be some pent-up demand and more developer launches before the year ends."

Ms Sun said: "Due to increasing market uncertainties, buyers seem to be more selective and price sensitive." She also projects prices of new homes may come down by 3-5 per cent this year. "We observe that projects that are well-located and attractively priced continue to attract buyers." OrangeTee & Tie expects that developers will sell 6,500 to 7,500 new homes this year.

Meanwhile, Huttons expects the total sales for new units this year could fall to 7,000-8,000 units, while ERA Realty puts this year's tally at between 6,000 and 8,000 units.