Singapore New Private Home Sales Report: August 2022

New Private Home Sales Plunge 48% Month-on-Month in August Due to Lack of New Launches

• Total new private home sales in August fell by nearly half to 437 units from 834 units sold the previous month, due to a lack of new project launches during the Hungry Ghost Festival.
• New private home sales were led by the Core Central Region (CCR), with 220 units sold at a median price of S$2.25 million, accounting for half of the new private home sales in August.
• Approximately 13% of new private home buyers in August were foreigners, mainly driven by home sales in the Core Central Region (CCR).

Developer sales saw a significant decline from July to August due to the lack of new project launches during the lunar Hungry Ghost month. New private home sales in August dropped by about 48% to 437 units (excluding Executive Condominiums, ECs), compared to 834 units transacted in the previous month. This is the lowest monthly sales since 277 new units were sold during the COVID-19 circuit breaker period in April 2020. Compared to the same period last year, new private home sales fell by about 64% from 1,216 units in August 2021, when The Watergardens at Canberra was launched, helping to boost sales activity.

New private home sales (excluding ECs) in August brought the total sales for the first eight months of 2022 to 5,493 units, a year-on-year decrease of nearly 41%, as fewer new projects were launched this year, which suppressed transaction volumes.

Given the lack of major new launches in the market and limited unsold inventory, especially in the Rest of Central Region (RCR) and Outside Central Region (OCR), the subdued sales in August are not surprising.

With the unsold new home inventory in the OCR nearing depletion, projects in the Core Central Region (CCR) and RCR accounted for the vast majority of the best-selling residential projects this month. In the high-end residential segment, the CCR led total new private home sales in August with 220 units, a 19% increase from July, and accounted for half of the sales in August. Hyll on Holland was the best-selling project in August, selling 42 units at a median price of S$2,674 per square foot. Other CCR projects that contributed to sales include Perfect Ten and The Hyde, which sold 27 units (median price S$2,942 psf) and 20 units (median price S$3,002 psf) respectively.

Developers sold 127 homes in the city-fringe RCR in August, a 22.6% decrease from 164 units in July. Riviere was the top-performing RCR project, with 28 units changing hands at a median price of S$2,862 psf. Homebuyers also purchased new units at One Pearl Bank, The Landmark, Avenue South Residence, and Forett At Bukit Timah, with median prices ranging from S$2,274 psf to S$2,635 psf.

From July to August, OCR new private home sales plummeted by 81.4%, with developers selling only 90 new units. This is likely the lowest monthly sales since 46 new OCR units were sold in January 2009. The best-selling OCR projects in August were The Gazania, which sold 16 units at a median price of S$2,222 psf, The Watergardens at Canberra, which sold 12 units at a median price of S$1,423 psf, and Urban Treasures, which sold 10 units at a median price of S$2,057 psf.

Developers released 134 new units (excluding ECs) to the market in August, compared to 402 units last month. In the first eight months of 2022, a total of 3,105 new units (excluding ECs) were launched for sale, a decrease of 61% from the same period last year.

In the absence of new launches in the mass market to drive sales, CCR projects have filled the sales “gap”. The CCR sub-market, generally considered the proxy for the luxury housing market, accounted for half of the new private home sales in August. Data from URA’s Real Estate Information System (REALIS) shows that Singaporean buyers accounted for about 71.5% of new CCR private home sales in August, while foreign buyers and Singapore Permanent Residents (PRs) accounted for 16.7% and 11.8% of new CCR private home sales, respectively (see Figure 1).

Overall, foreign buyers accounted for about 13.3% of total new private home sales in August, higher than the 5.1% in July. Our overall observation is that the proportion of foreign buyers has been gradually increasing since April 2022, following the further relaxation of our country’s border restrictions, compared to the first quarter of this year.

Due to the lack of new launches, the median price of new private homes in the OCR fell by nearly 11% month-on-month in August to S$1,860 psf (see Table 1). Meanwhile, the median transacted prices in the CCR and RCR climbed by 2.2% and 4.6% respectively, to S$2,802 psf and S$2,431 psf.

The average price gap between new private home sales in the CCR and OCR widened from 37% in July to 55% in August. In the absence of new OCR projects, the widening of the price gap is expected, as new projects tend to support prices in their launch month (see Figure 2). With several OCR projects (Sky Eden@Bedok and Lentor Modern) set to launch in September, the average price of OCR projects may see an increase.

Market Outlook

The low sales volume in the OCR in August (90 units) can be seen as an indication of the tightening supply of new homes in the mass market. Based on URA data from August, many OCR projects in the market are either fully sold out or have very few unsold units, with several projects having remaining units in the single digits.

Many of the unsold units may also be larger apartments, which might not fit the needs or budgets of some potential buyers. The supply crunch, coupled with genuine buying demand, has led to strong sales momentum for recently launched new OCR projects, namely AMO Residence in July and Sky Eden@Bedok this month.

With new projects launching in September, Anjiasg expects new private home sales to rebound this month. Sky Eden@Bedok sold about 75% of its 158 residential units on its launch day on September 7. Another upcoming new project is Lentor Modern, which is also expected to perform well when it launches on the weekend of September 17.

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