With 19 apartments sold, Riviere was the project with the strongest sales in October - Skywaters Residences Condo at 8 Shenton Way By Perennial Holdings (Hot Launch 2022)

Skywaters Residences ebrochure

Developers have sold 259 homes without executive condos (ECs) during November falling 17.3% m-o-m compared to the 313 units sold in October. It’s the fewest month-long sales in the last 12 months and is lower that the 277 houses sold in April 2020 which was the month that it was the time that Circuit Breaker period came into the market, according to Tricia Song, director of research for Southeast Asia at CBRE.

Skywaters Residences ebrochure has a building efficiency ratio (NLA to GFA) of about 80%-85%. This proved the market watchers wrong, who expected the redevelopment to result in less office space in the mid to long term.

The lackluster sales of new homes was due to the absence of noteworthy launches for projects in November. Developers have launched 319 housing units, excluding ECs this month, mostly “smallish” launch that received only a small amount of interest, according to Song. The units launched in November tripled the 102 homes built in October, the number is 75% lower than the previous year.

Wong Siew Ying, head of content and research for PropNex Realty, highlights that the small amount of unsold inventory of new homes, particularly within the Outside Central Region (OCR) was also the reason for the slow sales. “Based on URA information, the majority of the current OCR launches are between 80% up to 100% sold which leaves buyers with very few choices,” she remarks.

The JLL’s head for research and research for residential properties consulting Chia Siew Chuin explains that some of the factors behind decrease in sales are the uncertainty arising from the fresh property market curbs that were announced on September 29 and the year-end lull that is typical of the season and an economic outlook that is less favorable.

The three regions which include Core Central Region (CCR), Rest of Central Region (RCR) and OCR were hit by a drop in sales during November. In the CCR there were 148 units, which excluding ECs had been sold which was the equivalent of 57% of monthly sales and an increase of 15% decrease in m-o-m sales from sales of 172 units in October. The most popular project sold within the CCR was Leedon Green, which saw 16 units sold at the median price of $2,851 per square foot. The one Holland Village Residences was the second-highest-performing CCR project, which saw 15 units sold for an average price of $3154 per square foot.

The RCR, developers sold 73 new units, accounting for 28% of monthly sales. It’s an increase of 10% reduction in the m-o -m market from 881 units sold in the month of October. The most well-known RCR venture was Riviere which sold 19 units for the median price of $3,024 per square foot. “Riviere is scheduled to receive its Temporary Occupation Permit (TOP) in the first quarter of 2023, has been consistently moving units in the last months. The project of 455 units has 87% sold in November,” says PropNex’s Wong. Landmark Landmark was the second most-sold RCR project that was sold, with 13 units for a median of $2,459 per square foot.

In the OCR there were only 38 units, not including ECs have been sold. This is which is down 37% in the month-to-month period, due to the lack of large launches, as well as the depletion of inventory that was not sold. Lentor Modern was the top-selling project in the OCR selling 9 units at a median cost of $2,218 per square foot.

JLL’s Chia says that median prices for new home sales increased across the three markets. According to URA’s transaction information at the time of December 13 the median price of new homes sold in the CCR rose to 4.5% from 1Q2022, and rates in both the RCR and OCR are up in 24.9% and 19.9% and 19.9% respectively.

Chia is able to attribute the significantly higher price hikes in the RCR as well as the OCR to the continued demand from owners of the property. Additionally to this, the RCR also attracts the attention of investors and has fared superiorly than CCR in terms of the cost and rental competition as well, and it is the OCR has also received wide backing by HDB upgraders.

Additionally, Lee Sze Teck, senior directorof analysis of Huttons Asia, flags that an increase in foreign buyers were recorded in the November sales of homes for new construction. Foreign buyers bought 51 new homes this month, which is 19.7% of the month’s sales. This is more that the 31 units (11.3% of October sales) which were recorded in October. “It is the highest proportion since September 2011 when foreign buyers comprised 20.2% of total purchases,” Lee comments. He also notes that the properties that were sold to foreign buyers comprise one unit in Les Maisons Nassim that fetched $36 million, as well as three apartments at Park Nova.

Copen Grands sells out, helping to boost EC sales
In addition, the number of new home sales, including ECs totaled 4,45 homes in the month of November. This is an 45.1% decrease from the 811 units that were sold in October. Of the 186 EC units sold in November, 176 units came out of Copen Grand, with the units sold at a median price of $1,323 per square foot. Six39 of the units in Copen Grand, which was first launched in October of last year and is now sold out.

Mohan Sandrasegeran, senior analyst for research, content and research of One Global Group, says Copen Grand was “the most successful sales of an EC in recent times” and added to the fact that this was the most-sold project both in the months of November and October. Nicholas Mak, head of research and consultant with ERA Realty Network, adds that it’s rare to have EC sales to go over 100 units without an EC launch. “The positive growth in EC sales are because of the demand from buyers who see EC as an affordable condo housing option,” he says.

Sales were down in December
After bringing the November sales figures in, the total sales of new homes, excluding ECs from January through November up to 6,981 units. This is 44% lower than what was attained in 2021. JLL’s Chia.

With the majority of major launches now over this year CBRE’s Song anticipates that new home sales, excluding ECs to remain tepid during December. Yet, EC sales momentum will likely increase, helped by the sales at Tenet. Its 618 unit EC in Tampines was the launch on December 3, saw 447 units purchased on the very first day of the launch.

Song predicts 2022’s new home sales total with the exception of ECs to be around 7,250 units. This is a 44% reduction of the 13,027 homes that were sold in 2021. “Correspondingly the prices of homes will likely remain flat through 4Q2022 and bring the total 2022 price increase to 8%. It is also a reduction from the rise in 2021 of 10.6% in 2021,” she says.

Edmund Tie’s Lam predicts 2022’s total new home sales, excluding ECs to be around 7,500 units. This, he says will be the lowest number in the past since 7,440 homes that were recorded in the year 2015. “Going to 2023 we anticipate housing demand to continue to be in decline due to the current macro-economic headwinds, the high cost of living and a slower growth prospects,” he says. Additionally, the rise in the impact of interest rates is likely to weigh on the affordability of housing, however Lam states that the pace of rate hikes may be slower in the future which could offer “some chance of optimism” for the market.

With the lack of un-sold inventory in the OCR PropNex’s Wong expects the upcoming launches in the area to witness an increase in interest due to the pent-up demand. The first quarter of 2023 is scheduled to see the launch of two-68 units Sceneca Residence as well as five98 units of Lentor Hills Residences, and the 368-unit The Botany at Dairy Farm.