New private home sales fell sharply in June, with transaction volumes dropping by 64% from May to June due to a lack of new project launches. Developers sold 488 new private homes (excluding Executive Condominiums, ECs) in June, down from the high of 1,355 units last month, when sales were boosted by new projects Piccadilly Grand and Liv@MB. Compared to the same period last year, sales also declined, falling by 44% from the figures in June 2021.
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June’s transaction volume brought new private home sales for the second quarter of 2022 to 2,504 units (excluding ECs), a 37.2% increase from the previous quarter. In the first half of 2022, developers sold a total of approximately 4,329 new private homes.
The slowdown and decline in new private home sales in June were expected. This is because no new projects were listed for sale during the month, and it also considers that the sales surge in May was driven by new launches. Additionally, the resumption of international travel, coupled with the June school holidays being a popular time for many families to travel abroad, may have also contributed to the slowdown in market activity.
The Core Central Region (CCR) led new private home sales in June with 206 transactions, a 4.2% decrease from May’s volume. The top-performing CCR projects in June included Haus on Handy, which sold 21 units at a median price of S$2,654 psf; Leedon Green, which sold 20 units at a median price of S$2,843 psf; and Irwell Hill Residences, which sold 19 units at a median price of S$2,876 psf.
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Due to the lack of new launches, new private home sales in the Rest of Central Region (RCR) saw a significant drop, falling 81% month-on-month from a high of 893 units in May to 171 units. RCR sales in May were boosted by the launches of Piccadilly Grand and Liv@MB. The best-selling RCR projects in June were Riviere, which sold 25 units at a median price of S$2,856 psf, and Normanton Park, which sold 21 units at a median price of S$1,864 psf.
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The absence of new launches in the OCR and tightening unsold inventory continue to weigh on mass-market sales. More buyers may find CCR projects more attractive to them as the gap in average transacted price per square foot (PSF) between new CCR and RCR launches continues to narrow. The price gap in June was 16.1%, compared to 21.4% in May (see Chart 3). The median transacted price for non-landed new private homes in the OCR (excluding ECs) in June was S$1.81 million, while for CCR and RCR it was S$2.09 million and S$2.35 million, respectively. Notably, the median transacted price in the RCR has surpassed that of the CCR.
According to caveats lodged on the REALIS system, approximately 75% of new private home transactions in the RCR were priced above S$2 million. This mainly includes larger-sized units and projects with higher unit prices such as CanningHill Piers, Riviere, and Avenue South Residence. This has helped to lift the overall median price in the RCR.
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Market Outlook
With the launch of AMO Residence on July 23, AnjiaSG expects new private home sales in July to surpass June’s performance. Additionally, some buyers may want to complete their property transactions before the start of the seventh lunar month (Hungry Ghost Festival) at the end of July. Other new projects slated for launch in the third quarter of 2022 include The Arden at Phoenix Road, Lentor Modern at Lentor Central, Sceneca Residence at Tanah Merah Kechil Link, and Sky Eden at Bedok Central. With more new OCR launches, this will provide more options for potential buyers amidst a historically low inventory of unsold new homes in the Outside Central Region.
Since the introduction of new cooling measures in December 2021, and with more new projects gradually launching, more buyers may decide to enter the property market, including those who have been adopting a wait-and-see approach. As prices are unlikely to see a significant drop in the short term due to firm land costs and rising construction costs, more homebuyers may choose to purchase sooner rather than later.
They may also be looking to secure more favorable mortgage rates, as frequent interest rate hikes are expected in the future. That being said, given the global economic uncertainties, buyers are expected to remain cautious and think twice before committing.
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