As Singapore moves towards living with COVID-19, with further easing of safe management measures and travel restrictions, demand for new private homes in the Core Central Region (CCR), representative of high-end luxury residences, increased for the second consecutive month in April 2022.
Strong sales in the CCR helped support overall new private home sales in April. Developers sold 653 new private homes (excluding Executive Condominiums, ECs), which was almost flat compared to the 654 units transacted in March. Compared to the same period last year, new private home sales in April 2022 fell by nearly 49% from the 1,270 units sold in April 2021. The launch of Irwell Hill Residences and One-North Eden in April 2021 boosted sales at that time.
Following a 39.1% month-on-month increase in March, new private home sales in the CCR grew by another 34.6% month-on-month to 206 units in April 2022. The CCR accounted for 31.5% of the total new private home sales last month and was the only sub-market to see a month-on-month increase in new home sales in April. Top-selling projects in the CCR for April include The Avenir, which sold 23 units at a median price of S$3,227 psf, and Fourth Avenue Residences, which sold 21 units at a median price of S$2,500 psf.
Meanwhile, due to a dwindling number of available units and the absence of major new launches, new private home sales in the Rest of Central Region (RCR) and Outside Central Region (OCR) declined by 9.7% and 12.7% respectively from March to April.
Developers sold a total of 289 new units in the RCR. This included 52 units from Normanton Park at a median price of S$1,861 psf, and 35 units from Riviere, sold at a median price of S$2,779 psf. With the inventory of unsold new private homes falling to a new low of 3,890 units at the end of Q1 2022, the monthly decline in new private home sales in the OCR was more pronounced in April, falling 12.7% month-on-month to 158 units. The top-selling OCR project in April was The Florence Residences, which sold 24 units at a median price of S$1,717 psf.
Following a sluggish Q1 2022, the private residential market continued to face limited new launch supply in April. Developers released 397 new units (excluding ECs) to the market, compared to 309 units in March. Most of the units launched in April were from previously launched projects. The lack of major new launches, especially in the mass market, hampered developers’ overall sales amid challenges from higher ABSD rates for foreign buyers and investors, rising interest rates, and inflation risks.
In April 2022, Singaporean citizens continued to form the largest proportion of new private home buyers. However, it was observed that more foreign buyers have returned to the local market, possibly due to the easing of COVID-19 measures and travel restrictions. According to caveat data from the URA’s Realis system, the proportion of foreign buyers in new private home purchases increased across all sub-markets from March to April. Foreign buyers accounted for 13.1% of new private home sales in the CCR in April, up from 9.9% in March. The corresponding figures for the RCR and OCR in April were also higher at 9.4% and 3.2% respectively, compared to 2.9% and 1.1% in March (see chart below).
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According to caveat data, about 45.5% of non-landed new private homes transacted in April 2022 were priced below S$2 million (see Chart 1), lower than the 56% in March. The majority of transactions below S$2 million were for homes in the OCR (36.9%), followed by the RCR (36.3%) and CCR (26.8%).
Based on caveat data from Realis, the median transaction price for non-landed new private homes (excluding ECs) rose across all three sub-markets in April, with the RCR seeing the largest increase. In April, the median transaction price in the RCR rose by 21.5% month-on-month to S$2.24 million. The median price in the CCR increased by 8.2% month-on-month to S$2.28 million, while the median price in the OCR saw a slight 1.3% month-on-month increase to S$1.76 million.
Market Outlook
With mortgage rates expected to rise, there may be more cautious homebuyers in the market. They might downgrade their purchasing options, choosing smaller, more affordable units. Some homebuyers may also decide to enter the market sooner to lock in better mortgage rates, as rates are expected to continue rising this year. For investors, the prospect of a long-term rise in interest rates will be a concern, as it could erode future rental yields. With more factors to consider, buyers may need more time to make a decision before purchasing a property.
Furthermore, inflationary pressures and rising costs, including construction and labor costs, could lead to an increase in property prices. Real estate is generally seen as an effective hedge against inflation, with its value tending to grow over time. This may prompt buyers and investors to enter the market to hedge against inflation risk.
Looking ahead, private home sales are expected to pick up as more new projects are launched. Some of the new projects set to launch in May and June include LIV＠MB, Atlassia, Baywind Residences, and The Arden.
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