Due to the seasonal slowdown from the year-end festivities, new private home sales fell by 58% in December. Developers sold 650 new private homes (excluding ECs), compared to 1,547 units in November. Additionally, the new cooling measures implemented from December 16, as well as a relatively limited number of new launches, also put pressure on sales. In December, there were three new launches, all in the central region: Zyanya at Lorong 25A Geylang sold 2 of its 34 units, Mori on Guillemard Road sold 71 of its 137 units, and Perfect Ten on Bukit Timah Road sold 11 of its 230 units.
Compared to the 1,217 units sold in December 2020, last month’s new private home sales saw a year-on-year drop of 46.6%. The 650 units sold in December 2021 brought the total new private home sales for the full year 2021 to 13,118 units, about 31% higher than the figure in 2020. This is the highest new private home sales volume since the 14,948 units transacted in 2013.
New private residential sales in December were led by the Rest of Central Region (RCR) market, which sold 292 homes. Due to the launch of CanningHill Piers in November which sold 910 new homes, December’s sales volume decreased by 68% compared to November. With limited new RCR launches, the previously launched Normanton Park became the best-selling project in December, selling 73 units at a median price of S$1,831 psf.
Meanwhile, new home transactions in the Outside Central Region (OCR) were at 224 units, a 51% drop from the 459 units sold the previous month. This is the lowest monthly OCR sales volume since the circuit breaker period in April 2020, when 98 new private homes were sold. The slowdown in OCR sales is partly due to the rapid depletion of unsold inventory and a lack of new project launches. In December, Dairy Farm Residences was the best-selling OCR project, with 42 units changing hands at a median price of S$1,674 psf.
Sales momentum in the Core Central Region (CCR) continued to slow in December. Developers sold 134 CCR homes, a 24.7% decrease from the 178 units transacted in November. As the new cooling measures have a greater impact on investors and foreigners, sales in the CCR market, which tends to attract a large number of such buyers, are expected to slow down. Leedon Green was the most popular CCR project last month, selling 29 units at a median price of S$2,727 psf.
In terms of units launched, developers released 383 new private homes (excluding ECs) to the market in December 2021, a 70% decrease from the 1,283 units launched the previous month.
The new cooling measures may have caused some buyers to reconsider their options and home-buying decisions, but it is important to note that sales have not dried up as a result. According to caveat records, about 39% of new home sales in December 2021 were made on or after December 16, when the new cooling measures took effect. This proportion is higher than the 26% recorded in the same period in 2020. Therefore, it is still too early to determine the exact impact of the cooling measures since their introduction in December, as this period overlaps with the year-end seasonal slowdown.
Based on caveats lodged on the real estate information system, foreigners and Singapore Permanent Residents (PRs) accounted for 4% and 12.5% of new private home sales in December 2021, respectively. Meanwhile, 83% of the private homes sold were purchased by Singapore citizens, a slight increase from 82% in November 2021 (see Table 3). Singapore’s commitment to restoring quarantine-free travel with more countries may help boost buying interest from foreign buyers, but the hefty Additional Buyer’s Stamp Duty (ABSD) for foreign buyers may dampen this demand, with Singapore citizens and PRs filling the gap.
In terms of price, based on caveats, about 66.6% of the non-landed new private homes transacted in December 2021 were priced below
S$2 million (see Chart 1), a slight increase from the 61.4% in November. The majority of transactions below S$2 million comprised homes in the RCR (48.7%), followed by the OCR (39.9%), and the CCR with the smallest share (11.5%).
Market Outlook
Despite the significant drop in sales in December 2021, it is worth noting that last month’s new private home sales still surpassed the average December sales over the past 10 years (607.1 units). Currently, PropNex Research believes that seasonal factors had a significant impact on the slowdown in December sales. The effects of the new cooling measures may still be permeating the market as buyers, especially investors, reassess their options.
In January and February 2022, new private home sales are expected to be relatively quiet due to the Chinese New Year celebrations and a limited number of new launches. Sales activity may start to pick up after this period as more new projects are gradually launched. The first new launch of the year is Belgravia Ace, a 107-unit strata-landed development on Ang Mo Kio Avenue 5, which is scheduled to launch later this month. Following that, buyers can look forward to The Arden, a 105-unit project on Phoenix Road developed by Qingjian Realty.
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