170 private new homes will be sold in December 2022, the fewest since January 2009

Read related post: By November 2022, a cumulative take-up rate of 95% indicated that the project was almost fully sold

Developers sold only 170 houses for new construction (excluding executive condominiums, also known as ECs) in December 2022. This is an increase of 34.6% plunge from the 250 units sold one month prior. Based on a y-o-y perspective the number of new homes sold fell by 73.8%.

The lowest monthly volume of sales in the primary market since 2009 in which developers sold the construction of 108 homes, as per Nicholas Mak, head of research and consulting for ERA Realty Network. At the time the market was recovering from the effects from the Global Financial Crisis.

It also marks the third consecutive month of drop in the number of homes sold. Like the two previous months, the sluggish numbers in the month of December were fueled by the absence of any new private residential launches with just 45 houses (excluding ECs) launched for sale — the lowest amount since URA began reporting the figures in June 2007 says Lee Sze Teck, Huttons Asia’s chief research officer.

The ERA’s Mak is also adamant that the slow sales to the annual slowdown. “Many market-related decision makers, like buyers as well as brokers and sellers used the school holidays at the end of the year to travel abroad after being unable to do so in the past three years due to the pandemic” Mak adds.

In the meantime, Tricia Song, head of research Southeast Asia, at CBRE believes that these cooling steps will roll out on September 30th 2022. a “deteriorating economic environment” and increasing mortgage rates, also led to the decline in sales.

However, the sales of EC units saw an increase in December 2022, growing from the 186 units sold at the end of November, 2022. This was increased to 468 units in the last month. This is in line with the announcement in the year 2022 of Tenet, a 618-unit EC located in Tampines owned by Qingjian Realty, Santarli Realty and Heeton Holdings. The EC was a huge success, with 451 or 73% of the units being sold for an average price of $1,381 per sq ft in December 2022. This made it the most popular project of the month of December. On January 7 the joint developers revealed that Tenet had achieved a buy-in rate of 93% (576 units) following the release of the remaining units available for sale were made available to buyers who had previously purchased the unit.

With ECs including ECs, home sales totaled 638 units last month which was up from the 446 units that were sold during November of 2022.

OrangeTee & Tie’s Sun points out that the popularity of Tenet mirrors the success of Copen Grand which is the 639-unit EC that was launched in Tengah. After its debut in October 2022 Copen Grand saw a strong response, with the sale of about 75% of its units within the first month, but the remaining units were all sold the following month. “The excellent selling performance for both of these projects suggests that the market is still high for ECs in spite of the recent measures to cool the market and increasing the interest rate,” she comments.

CCR transactions are the top-selling sales
Excluding ECs the three regions that comprised of Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) experienced a drop in the number of new homes sold in December 2022.

In the CCR the month of March, 89 new homes for sale were private in the CCR, which is the 52% of the total monthly sales and an increase of 40% reduction of the 149 homes that were sold in the month preceding. The most popular project sold within the CCR is Leedon Green, that saw 11 units sold for a median cost of $2,886 per sq ft.

In the RCR there were 54 new homes for private buyers were sold in the month of December 2022 which accounted for 32% of monthly sales. This was an average 26% decrease in m-o-m sales from the 73 units that were sold during November of 2022. The most well-known RCR developments are Riviere as well as The Landmark, which moved 14 units per. The units in Riviere were sold for an average price of $2,978 per square foot as opposed to the units of the Landmark was sold for $2,590 per square foot. The Landmark was not included in the sale. Tenet both developments also ranked as the top-performing projects in the month of.

In addition, only 27 homes for sale were sold in the OCR decreasing 29% over the 38 homes sold in during the same month.

Leonard Tay, Knight Frank Singapore’s head for research, states that for the third consecutive month that the CCR has recorded the highest volume of private home sales. “These consistent numbers suggest that home buyers with high net worth who have private capital seeking safe investment opportunities , and aren’t dependent on financing via debt may be beginning to look for homes in most desirable regions within the CCR,” he elaborates.

CBRE’s Song notes that the increased homes sold in CCR could indicate that buyers value CCR homes, as the price gap between homes built in the CCR as compared to OCR and RCR shrinks, in conjunction with an evaporation of the inventory of homes that are not sold in the latter regions.

Foreign buyers’ purchases increased in December 2022, taking total 37 transactions which is 22% of the new home sales in comparison with 18.8% the month before. This is the largest amount of transactions made by foreign buyers over the course of the year.

New home sales totalled 7,153 units by 2022.
Based on the figures for December 2022 new home sales (excluding ECs) totalling 2022 will total 7,153 units, which is a 45.1% y-o-y decline from 13,027 units in 2021. As per Christine Sun, senior vice head of research and analysis for OrangeTee & Tie, this is the lowest year-on-year residential sales of homes since 2008 which saw the sale of 4,264 units. Knight Frank’s Tay states that the total figure is less than his initial forecast of 8,000-9,999 units in 2022. Tay attributes the decline in sales of new homes due to the lack of major launches in specific months, specifically between the beginning and the close in the calendar year. “In the 1Q2022, developers were hesitant to begin new projects due the cooling measures announced in December 2021 and in the last third of this year’s calendar, buyers in the area took revenge trips and holiday plans in the wake of two years trapped by the pandemic” the author describes.

Mohan Sandrasegeran, senior analyst in research, content and research for One Global Group, adds that, when excluding ECs and excluding major launches like The 407-unit Piccadilly Grande or the 605-unit Lentor Modern, the majority of new launches in 2022 were smaller or boutique projects. Developers have launched 4,528 private residential units in 2022. This is less than half of the units launched in 2021, and the lowest annual number of units since the data was released by URA.

Sandrasegeran also reveals that foreign buyers purchased 502 new houses in 2022. That’s 7% of all new private sales of housing for the year. For comparison foreign buyers purchased 554 new homes, which is approximately four% out of total in 2021. “The Singaporean property market has been a draw for foreign buyers despite the increase in prices of stamp duty for foreign buyers. These rates were raised to 20% to% up to% at the end of December in 2021.” the author says.

New launches are planned to help 2023 sales
In the months ahead the pace of new home sales could be slow, according to CBRE’s Song. “Home buyers as well as developers will likely continue taking a wait-and-see attitude during the first quarter of 2023, in spite of a negative economic outlook as well as an expected Chinese New Year seasonal lull.”

However, sales in January will likely to be helped due to Sceneca Residence, the 268-unit development situated in Tanah Merah Kechil Link by MCC Singapore, Ekovest Development and The Place Holdings. The project was the first of its kind to launch this year, had more than 160 units (about 60%) sold for an average of $2,072 per square foot on its January 14 launch day. “This positive result will help to eliminate doubts about the viability of this market, and also set the scene for the next launches scheduled for the months of February and March in 2023.” Lee says. Huttons’ Lee.

In addition, Knight Frank’s Tay estimates that as many as 12,000 new private homes may be built during the year, bringing some relief for the under-supplied market, and more options for homebuyers. But, uncertainties in the economy such as the rise in interest rates as well as employee cutbacks, may dampen enthusiasm. He anticipates lower sales of private homes of 7,000-8,000 units in 2023. Prices are expected to increase up to 5-% or 7%.

The ERA’s Mak offers an optimistic view and believes that more buyers will be attracted back to the market with the forthcoming launches, notwithstanding another decline in the current economic situation. “Developers might sell 10,000 to 9,000 housing units. Thirteen homes in Riviere were sold for an average price of $2,978 in December 2022,” he estimates.