Developers sold 1,038 new homes, excluding executive condos (ECs) during May which is 17% more than 887 homes sold in the month prior, according to URA’s data release URA in June. This brings the total number of private homes sold to 3,181 units in all of May’s first 5 months.
The figures for May are the most significant new private home sales in the month in the month of May since 2022 in which 1,355 homes were sold, according to Christine Sun, senior vice head of research analytics at OrangeTee & Tie. It is also the five-month streak of growth. With the addition of ECs the sales increased to sixteen% between 909 and 1,055 units during May.
The sales were aided by the announcement of two major projects which include The Reserve Residences and The Continuum which are both inside The Rest of Central Region (RCR). In the wake of these projects, developers launched a total of 1,595 units, excluding ECs available for sale in May, more than double the 798 units that were launched in the month before. This is the biggest month-long launch of units since the November 20, 2021’s 1,283 units according to Chia Siw-Chuin from JLL’s director of research and research for residential properties and consulting.
The Reserve Residences located on Jalan Anak Bukit in District 15, sold 635 of the 732 units that were released to the market in May. The Reserve Residences saw 523 units sold with a median value of $2,461 per square foot, which makes it the top-selling private residential development in the this month. Its Continuum 816-unit freehold development located on Thiam Siew Avenue recorded 221 units sold at a median of $2,720 per square foot. Together, the two developments have boosted prices in the RCR which was recorded 847 units in May, accounting for 82% of all developer sales.
The Core Central Region (CCR) In the Core Central Region (CCR), 152 new homes were purchased by developers in the month of May. This is fifteen% from developers’ total new home sales, and an 26.9% fall m-o-m. The top-selling CCR projects are the Atelier which sold 22 units for an average price of $2,685 per sq ft in May, and Pullman Residences Newton that sold 16 units for the median price of $3,278 per square foot.
The Outside Central Region (OCR) New home sales in the OCR totalled 39 homes (4% of developers’ new home sales) which was bolstered by a lack of new launches as well as an abundance of unsold inventory. “Based on URA statistics, of the massive market projects that have been put up to be sold in the OCR around 93% all properties (excluding EC) in the projects have been sold, leaving only a few alternatives for prospective buyers” propnex’s Wong. OCR unit sold during May show an 23.5% decline compared to the month prior.
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There is a noticeable drop in purchases by foreigners
The new private home sales that took place in May were largely fueled by demand from locals and local demand, which was reflected in Singaporean Citizens and Permanent Residents (PRs) accounting for 85.5% and 11.1% of transactions, respectively. Chia Siew Chuin, the head of research on residential properties, research and consulting at JLL noting that the demand for both groups of buyers remains strong despite cooling measures, increased rates for homes and rising interest rates. “Fundamental market demand locally for new homes remains strong, particularly for noteworthy projects that have attractive characteristics and launches in areas where the demand for homes continues to exceed the limited supply of private homes for sale,” she remarks.
However, the percentage of new homes owned by foreigners fell significantly. In May, foreigners bought 36 non-landed houses last month, which made the up 3.5% of non-landed new private home sales, as compared to the 8% reported in April. PropNex’s Wong states that it’s the smallest amount of foreign buyers since the end of December 2021.
Lam Chern Woon, head of research and consulting at Edmund Tie, attributes the reduction to the increase in additional Buyer’s Stamp Duty (ABSD) for foreign buyers up to 60%. “The harsh ABSD rate for international buyers have certainly caused a lot of people to stop in their in their home buying journeys,” he comments.
Eugene Lim, key executive officer of ERA Realty Network concurs. “The CCR and RCR market that used to attract more demand from foreign buyers, experienced a significant reduction in transactions by foreign buyers. The amount of units purchased by foreigners decreased from 38 units to 21 units within CCR as well as by 27 units to 13, in RCR,” he adds. In The Continuum as well as The Reserve Residences The developments saw just three and five units bought by foreigners.
Lee Sze Teck, senior director of research at Huttons Asia, believes that the percentage of purchases made by foreign buyers will continue to decrease over the next few months. “There was a period of transition in May which allowed buyers to buy properties in the country that had been exercised before May 17th to become subject to the prior ABSD percentage of%. Thus, the full impact of the cooling measures will be apparent by June” He explains. Huttons estimate that the percentage of homes bought by foreigners could drop to about 1% going forward.
The sales in June are expected to be more subdued
Looking ahead in the future, PropNex’s Wong anticipates that new house sales in private residences to experience the decline in June due to the absence of new launches, but the number of transactions could increase the following month due to the arrival of a number of new projects being planned. “We anticipate the launch of sales for Lentor Hills Residences as well as The Myst in early July and Pinetree Hill, Grand Dunman along with Lake Garden Residence could potentially be on the market too,” she says. The five projects of OCR and the RCR and OCR could provide more than 2800 housing units.
Huttons’ Lee adds that Altura is an executive condominium at Bukit Batok scheduled to its launch in July. He expects a strong demand for the development, noting that it’s the first EC construction in Bukit Batok in the last 22 years.
Leonard Tay, head of research at Knight Frank Singapore, expects local demand to continue to drive the demand for new homes in 2023, as new projects go on the market. “Demand for new goods is expected to remain firm…so long that the prices are within the range of affordability for this kind purchaser,” he opines. The author adds that foreign buyers will likely to remain in an open-minded attitude at present to determine the impact of the new policies on the primary sector of homebuyers. Knight Frank is maintaining its projection of developers sales of new homes that will range from 7,700 and 8,800 units for the whole year.