15 March 2022, SINGAPORE – The lack of major new launches continued to weigh on new private home sales in February. Developers sold 527 new homes (ex. Executive Condos) last month, representing a 22.5% decline from the 680 new units transacted in January 2022. This is the slowest monthly new home sales since 487 units were sold in May 2020. On a year-on-year basis, sales were down by 18.3% from the 645 units transacted in February 2021.

There was just one new project launched during the month – the 32-unit Royal Hallmark in Haig Road – which sold 10 units at a median price of $1,905 psf. In February, developers placed 194 units (ex. ECs) for sale on the market, an increase of nearly 9% from 178 units in January.

The Rest of Central Region (RCR) accounted for just over half of February’s sales with 266 transactions or 50.5% of the monthly total. Within RCR, Normanton Park led sales, transacting 85 units at a median unit price of $1,855 psf.

Meanwhile, 160 new private homes changed hands in the Outside Central Region (OCR) in February. Dairy Farm Residences was the top seller in OCR with 32 transactions at a median price of $1,716 psf. The sales volume recorded in the OCR in February 2022 is the weakest monthly sales volume that this sub-market had seen since 98 units were sold in April 2020, where the circuit breaker measures were imposed.

In the Core Central Region (CCR), new home sales fell to a one-year low with 101 units sold in February 2022. Leedon Green was the most popular CCR project during the month – transacting 14 units at a median price of $2,838 psf. The cooling measures introduced in December 2021 could have put a drag on sales in the CCR, as this sub-market tends to attract foreign buyers and buyers with multiple properties, who are more severely affected by the hike in additional buyer’s stamp duty (ABSD) rates.

Over in the EC segment, 32 units were sold in February – down from the 52 ECs sold in the previous month amid the dwindling unsold EC stock and lack of new EC launches. Parc Greenwich was the top selling EC project in February, transacting 18 units at a median price of $1,258 psf during the month.

“New home sales tend to be driven to a large extent by the new launches put up during the month. Given the dearth in new projects being put on the market, it is not surprising that sales have been muted in January and February. In addition, several other factors likely weighed on sales as well, such as the seasonal lull due to the Chinese New Year festive period and the market still mulling over the impact of the December 2021 cooling measures.

With the limited fresh launches, buyers have been picking up units from previously launched projects. The unsold inventory of new private homes has fallen to a record low of 14,154 units as at the end of Q4 2021 – this could mean that prospective buyers may have a limited selection of units to choose from. To this end, some buyers may well decide to wait for more projects to be launched in the coming months before entering the market to buy.

Thus far, we have not observed any significant erosion of confidence among home buyers in the wake of the Russia-Ukraine conflict. Amid uncertainties and volatility in the equity markets, some investors may decide to buy a residential property as a way to preserve their capital and hedge against inflation as real estate is usually seen as a more defensive asset.

In February, caveats lodged showed that the median transacted price of new private homes was $1.8 million – down from $2 million in January, where transactions at new launch strata-landed development Belgravia Ace likely supported values then. On the whole, the proportion of new private homes (ex. ECs) bought by foreigners remained stable at 4.9% of overall sales in February, a touch higher than the 4.3% in January. Meanwhile, Singaporeans accounted for 79.3% of sales and Permanent Residents purchased 15.6% of new private homes sold during the month.

We anticipate that new home sales will remain subdued in March without any major launches lined up. In Q2 2022, home sales should pick up as developers put more projects on the market. We expect some 8 to 9 new projects to be launched in Q2 2022, including The Arden, North Gaia EC, Piccadilly Grand, and Liv @ MB.

The upcoming launches may also help to spur interest in existing projects. When more new projects are launched, prospective buyers can compare the various offerings and prices, and some of them may eventually return to buy units at existing launches that they deem to provide more value”, commented Ms Wong Siew Ying, Head of Research & Content, PropNex Realty.