In May 2022, sales of new homes hit a six-month high, five months after the latest round of measures to slow the market was announced in December 2021.
Last month, developers sold 1,356 new homes that were not ECs, according to data from the URA.
Christine Sun, Senior Vice President of Research and Analytics at OrangeTee and Tie, said that this is a 105.5% increase from April 2022, when only 660 units were sold.
Tricia Song, who is in charge of research at CBRE, said that the strong sales were due to pent-up demand after the property curbs went into effect.
Sun also said that feelings usually get better between two and six months after each set of cooling measures.
“For example, sales of new homes outside of EC jumped by 139.2% from one month to the next in November 2018, about 4 months since cooling measures were put in place in July 2018. Also, sales went up by 63.6% from one month to the next in September 2013, two months after new TDSR rules were put in place in July 2013.
The fact that there won’t be many new homes coming out in the next few months is another reason why sales are going up.
Last month, two big projects also got started: Piccadilly Grand and Liv @ MB. Both have made news because a lot of people bought them during the first weekend of sales. By the end of May, 78.1 percent and 79.2 percent of people had signed up for these projects, respectively.
“As the first major private residential launch since December 2021’s cooling measures, Piccadilly Grand’s good performance shows that there is stable demand for well-located and reasonably priced homes in the residential market,” Song said. This is good news for other launches in 2022.
Song also said that most of the new homes sold last month cost between S$1.5 million and S$2 million, which was 30.5% of the total number of sales. This was followed by those that cost S$1 million to S$1.5 million (25.8 percent) and S$2 million to S$2.5 million (19.2 percent ).
Last month, a record number of 22 new condos (excluding EC) were sold for more than S$2,200 per square foot in OCR. Ten of these units are worth more than S$2,400 psf. The Gazania and The Lilium were where they all came from.
Even though the Additional Buyer’s Stamp Duty (ABSD) went up from 20% to 30%, more foreigners are coming back to the market.
Foreigners bought 84 units last month, which is almost 60 percent more than the 53 units they bought in April.
Sun had seen that less than 30 units were sold to foreigners in the first month of this year.
In a similar way, the number of units bought by permanent residents jumped from 79 in April to 142 in May.
Experts think that new sales will stay strong in the coming months and that more new products will be released.
This includes Lentor Modern and AMO Residence. Song thinks that upgraders and also first-time buyers, who aren’t affected much by the recent cooling measures, will keep showing interest in these projects.
This month, it was said that a Chinese buyer bought 20 units at CanningHill Piers, which cost over S$85 million.
“Because there aren’t many new homes coming out in 2022, CBRE Research predicts that new home sales will go down from 13,000+ units in 2021 to a normalized 9,000–10,000 units. Prices could stay the same or go up by up to 3 percent in 2022.
“Volumes and prices on the CCR market might be affected more because the cooling measures have a bigger effect on investors and foreigners. “Prices aren’t likely to fall, though, because the economy is strong, there aren’t many unsold units (14,362 as of Q1 2022), and occupancy rates are high,” said Song.