In October 2022, new private home sales fell to their lowest level in over two years. Developers sold a total of 312 new units (excluding Executive Condominiums, ECs), the lowest monthly sales since 277 units were sold in April 2020. October sales dropped by 68% compared to the 987 new private homes sold in September and fell by 65.8% year-on-year.
New cooling measures, the absence of major new launches (excluding ECs), and a limited number of available units in the market suppressed developers’ sales performance in October. Two new projects were launched in October: Enchante, a 25-unit development on Evelyn Road, and the Pollen Collection landed housing on Nim Road, each selling two units.
Meanwhile, the launch of the Copen Grand EC project (a hybrid of public and private housing) in Tengah in October boosted sales in the EC segment, marking one of the highest monthly sales in recent years. Developers sold a total of 498 new EC units in October, with Copen Grand accounting for 96% of these sales, selling 480 units at a median price of S$1,345 per square foot (psf). North Gaia EC sold 18 new units in October at a median price of S$1,307 psf. The overall EC sales in October saw a significant increase from the five units sold in September.
The Core Central Region (CCR) led new private home sales in October with 171 units sold, accounting for about 55% of the month’s sales. The best-selling CCR projects in October included Perfect Ten, which sold 37 units at a median price of S$2,955 psf, Pullman Residences Newton, which sold 13 units at a median price of S$3,039 psf, and Hyll on Holland, which sold 12 units at a median price of S$2,794 psf.
Meanwhile, developers sold 81 new units in the Rest of Central Region (RCR) in October, a 21% decrease from the 103 units sold in the previous month. Riviere was the most popular RCR project in October, selling 16 units at a median price of S$2,949 psf, followed by One Pearl Bank, which sold 15 units at a median price of S$2,497 psf. The lack of new launches and a dwindling number of unsold units impacted sales in the RCR.
In the Outside Central Region (OCR), new private home sales were constrained by limited unsold inventory. New private home sales in October dropped sharply by about 91% month-on-month to 60 units, from a high base in September. Sales in September were driven by the launch of Lentor Modern. Few OCR projects made it to the top ten best-selling private residential projects list for October (see Table 1): Lentor Modern and The Watergardens at Canberra were the best-selling OCR developments in October, each securing nine transactions at median prices of S$1,976 psf and S$1,483 psf, respectively.
Developers launched 102 new units (excluding ECs) in October, a nearly 89% drop from the 913 units released in the previous month. Apart from the 25 units at Enchante and 22 units at Pollen Collection from new projects, the new units that entered the market in October were mainly from previously launched projects. Meanwhile, a total of 639 new EC units were launched in October, all at Copen Grand. This is the largest EC project launch since the 616-unit North Gaia EC project was launched in April this year.
According to caveat data from the Urban Redevelopment Authority’s Real Estate Information System (REALIS), the overall proportion of foreign buyers in new private home sales surged from 4.5% in September to 11.7% in October, mainly driven by the CCR market. Among them, foreign buyers accounted for 14% of new private home sales in the CCR, up from 10.4% in September (see Figure 1). The proportion of Singaporean buyers fell across all market segments from September to October: accounting for 72.5% of CCR transactions, 71.4% of RCR, and 86.9% of OCR. The decline in the proportion of local buyers may be due to the limited inventory of new units in the city fringe and suburban areas, which tend to be more attractive to local owner-occupiers.
In October, the overall median transaction price for non-landed new private homes (excluding ECs) was about S$2.26 million, an increase of about 19% from approximately S$1.89 million in January of this year. In fact, the CCR accounting for more than half of the sales in October was likely the reason for the higher median price in October.
Meanwhile, due to weak sales in October (see Table 1), the median unit price for new private homes (non-landed and landed, excluding ECs) fell across all market segments. The median transaction unit price in the OCR fell by 8.4% month-on-month to $1,931 psf, lacking the catalyst of new private condominium launches. The median unit prices in the CCR and RCR declined by 0.2% and 3.6%, to S$2,867 psf and S$2,452 psf, respectively.
Singapore Market Outlook
The cooling measures introduced in September and the low volume of unsold units in the market dealt a double blow to new private home sales in October, with monthly transaction volumes falling back to the lowest level since the COVID-19 circuit breaker period in April 2020. As with previous rounds of cooling measures, according to AnjiaSG’s senior local property agent Leo Kwek, sales tend to dip in the month following the announcement of new restrictions. This is because many buyers may postpone their purchasing decisions, opting to observe the impact of these measures on the market and wait for the dust to settle before buying.
Furthermore, the limited number of new units for sale did not help the situation. Most new projects launched so far this year have seen good sales results, and previously launched projects have also sold most of their units. The remaining units on the market may also include more large-sized, higher-priced units, which might be beyond the budget of many buyers. This mismatch will prompt some potential buyers to look for opportunities in the resale market or wait for new projects offering brand new two- and three-bedroom units to be launched.
Therefore, Leo anticipates that upcoming projects will be well-received by the market, including the 618-unit Tenet EC project in Tampines launching in December, and the 268-unit Sceneca Residence project in Tanah Merah, likely launching in January next year. The strong sales of the Copen Grand EC project may also increase interest in existing launched projects like North Gaia EC and the upcoming Tenet in Tampines. Tampines is a mature housing estate, and there may be significant demand from HDB upgraders.
With no new major launches in November, new private home sales are likely to remain tepid. One project launched on the weekend of November 12: Hill House, a 72-unit development in the CCR’s River Valley. Hill House sold 12 units at an average price of nearly S$3,000 psf. Given that it is the year-end holiday season, these sales figures are generally in line with expectations.
Excluding ECs, developers sold 6,721 new private homes in the first 10 months of 2022, a 38.5% decrease from the same period in 2021. For the remainder of the year, the limited number of upcoming new launches will hinder developers’ sales performance. Leo anticipates that overall sales may fall short of our forecast of 8,000 units (excluding ECs) for the full year 2022.
With new cooling measures and macroeconomic uncertainties slowing the pace of price increases, Leo expects overall property prices to rise by 9% to 10% in 2022 and by 5% to 6% in 2023.
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