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In January, sales of new private residential units increased by 3.5 percent month over month, with developers selling 673 new residences excluding executive condos (ECs), up from 650 in December 2021.
New house sales excluding ECs were 58.8 percent lower y-o-y than a year earlier.
According to analysts, the little uptick in new house sales in January shows the market’s persistent trepidation after the implementation of additional cooling measures in December. In addition, there was a dip in activity coming up to Chinese New Year.
In January 2022, just two new projects were launched: the 107-unit strata-landed Belgravia Ace and the 16-unit Ikigai. Developers released a total of 178 units in January, the lowest number since February 2021, when 167 units were launched.
Optimism in the Market
Despite the limited number of launches, consultants are generally optimistic about the private residential market’s underlying strength.
While new home sales in January were much lower on a year-over-year basis, Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, points out that this was due to major launches in January 2021, including the 1,862 unit Normanton Park and the 429-unit The Reef at King’s Dock.
“The large amount of sales in January 2021 was an exception. “Total new house sales excluding EC for the month of January fluctuated between 324 and 620 units from 2014 to 2020,” she notes.
The consultants also point to Belgravia Ace’s success, which achieved a 90.6 percent take-up rate for its 85 apartments introduced in January. The strata landed apartments were sold for more than $4 million, according to Wong Siew Ying, head of research and content at PropNex Realty, indicating high demand and abundant liquidity in the market.
Projects like Belgravia Ace, which have popular selling qualities and locational characteristics, will still do well in terms of sales, according to Leonard Tay, head of research at Knight Frank Singapore, since there are still many real homeowners buying for their own occupancy.
“In the previous four years, the supply of landed properties in Singapore has remained stable at roughly 73,000 units and is not likely to rise much in the future.” Despite government interventions, landed and stratum landed developments will continue to grab demand due to the combination of these variables,” he says.
Normanton Park, which sold the most apartments in January with 94 transactions at a median price of $1,841 psf, as well as Woodleigh Residences,The Florence Residences and Dairy Farm Residences, were among the best-selling properties.
The Rest of Central Region (RCR) had the most transactions in January (excluding ECs), accounting for 429 units or 42.9 percent of all transactions. The Outside of Central Region (OCR) came in second with 275 units, accounting for 40.9 percent of all transactions, while the Core Central Region came in third with 109 units, accounting for 16.2 percent of all transactions.
The reduced launch volume in January resulted in a considerably higher take-up rate, according to Nicholas Mak, ERA Realty’s head of research and consulting. He points out that the private housing take-up rate (the ratio of units sold to units launched) increased from 170 percent in December 2021 to 378 percent the following month.
Milder Effect of Latest Cooling Measure Implementation
The latest round of cooling controls seems to have had a weaker effect on the new sale market for OrangeTee & Tie’s Sun than previous cooling measures.
“For example, once the new Additional Buyer’s Stamp Duty measures went into effect in January 2013, sales volume (excluding ECs) fell by 64.9 percent from 2,028 new houses sold in January 2013 to 712 units in February 2013,” she notes.
Following the implementation of new cooling regulations on July 6, 2018, new house sales (excluding ECs) fell 64.2 percent from 1,724 units in July 2018 to 617 units in August 2018.
Sun is optimistic that the market will recover in the coming months, based on the increase in new home sales in January.
“After the Chinese New Year celebrations, developers are planning to unveil additional projects. “As the dust settles after the two-month implementation of new cooling measures, some buyers may return to the market with more market clarity,” she says.
Sun’s sentiment is shared by other consultants. “Looking at prior patterns, the performance in January may provide some optimism that the new cooling regulations haven’t had a significant impact on demand for new private residences,” says PropNex’s Wong.
In the second half of the year, momentum in the private residential sector is expected to increase up. According to Knight Frank’s Tay, new sales volume might reach 8,000 to 9,000 units in 2022, with fewer launches in the pipeline, while resale volume could reach 16,000 to 19,000 units, driven mostly by owner-occupier demand.
“Owner occupiers wishing to upgrade and right-size are often unaffected by ABSD changes,” he says, “and will undoubtedly form the bulk of purchasers in 2022.” In 2022, a record number of 35,000 HDB apartments will approach the end of their minimum occupancy term, adding to the pool of prospective upgraders’ demand, according to ERA’s Mak.
Tay expects total private home prices to gradually rise in the second quarter of 2022, then rise by around 1% to 3% for the rest of the year.
Upcoming Launches in February / March 2022
The 32-unit freehold Royal Hallmark along Haig Lane, which is expected to open this month, is one of the upcoming debuts. Given the restricted availability of bigger houses in the area, as well as the project’s competitive pricing starting at roughly $1,700 psf, Tay expects the project will generate a lot of interest from purchasers.
The 105-unit The Arden on Phoenix Road, which is expected to open in March, is another scheduled launch. Meanwhile, North Gaia EC is slated to be available for purchase next month. “Given the shrinking supply of unsold new private residences in the RCR and OCR,” says PropNex’s Wong, “these fresh launches could draw purchasers’ attention.”