Developers offered 259 brand new houses without executive condos (ECs) for November. This is falling 17.3% m-o-m compared to the 313 units sold in October. It’s the fewest sales month from December 2014, and less than 277 homes sold in April 2020 which was the month that they were sold before the Circuit Breaker period came into in force, says Tricia Song, director of research Southeast Asia at CBRE.
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The poor performance of new home sales was attributed to the lack of notable launches of projects in November. Developers released 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 that were launched in October, they are 75% lower than the previous year.
Wong Siew Ying, head of research and content of research and content at PropNex Realty, highlights that the low inventory of unsold new homes, particularly within the Outside Central Region (OCR) is also a factor in the slow sales. “Based on URA research, the majority of the new OCR launches are between 80% or 100% sold and buyers are left with a limited number of choices,” she remarks.
In addition, JLL’s head of residential research, research and consulting Chia Siew Chuin explains that some of the factors behind less sales include the uncertainties that result from the fresh property market curbs that were announced on September 29 and the year-end lull that is typical of the season and the weaker outlook for economic growth.
CCR is the top-selling
Three regions that comprise 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 have been purchased, which accounted for 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 top-selling property of the CCR was Leedon Green, which saw 16 units sold for the median price of $2,851 per square foot. The one Holland Village Residences was the next-highest-performing CCR project, which saw 15 units sold for an average price of $3154 per square foot.
For the RCR, developers sold 73 new units, accounting for 28% of monthly sales. This is 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 development was Riviere which sold 19 units for the median price of $3,024 per square foot. “Riviere is scheduled to be granted a temporarily-issued occupation permits (TOP) in the first quarter of 2023 is consistently moving units in the last months. The 455-unit project has 87% sold in November,” says PropNex’s Wong. Its 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, excluding ECs have been sold. This is which is down 37% in the month-to-month period, due to the lack of large launches and the depletion of inventory that was not sold. Lentor Modern was the top-selling project in the OCR selling 9 units with a median 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 median prices for new homes sold in the CCR have increased in 4.5% from 1Q2022, and price increases in RCR and OCR rise in 24.9% and 19.9% and 19.9% respectively.
Chia is able to attribute the significantly higher price increases in both the RCR as well as the OCR to the continued interest from buyers of owner-occupied homes. 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 and rental competitiveness, while OCR has also seen a lot of interest from investors. OCR has also received widespread backing in the form of HDB upgraders.
In addition, Lee Sze Teck, senior directorof studies of Huttons Asia, flags that an increase in foreign buyers were recorded in the November sales of homes for new construction. Foreign buyers purchased 51 new homes this month, which is 19.7% of the month’s sales. This is greater that the 31 units (11.3% of October sales) that were sold in October. “It is the highest proportion since September 2011, when foreign buyers represented 20.2% of total purchases,” Lee comments. Lee adds that the units that were sold to foreign buyers comprise one unit located at Les Maisons Nassim that fetched $36 million, as well as three apartments at Park Nova.
Copen Grands sells out, increasing EC sales
The number of new home sales, including ECs were recorded at the figure of 445 in 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 launched in the latter part of October it is now completely sold.
Mohan Sandrasegeran, senior analyst for research, content and research for One Global Group, says Copen Grand has seen “the highest results of any EC in recent times” adding to the fact that this was the top-selling project both in the months of November and October. Nicholas Mak, head of research and consultant for ERA Realty Network, adds that it’s rare to have EC sales to go over 100 units, excluding EC launch. “The robust EC sales are due to the increasing demand of buyers who see EC as an affordable condominium,” he says.
Sales were down in December
After bringing the November sales figures in, that brings the total sales of new homes, excluding ECs between January and November at 6,981 units, which is 44% less than the number that was achieved in 2021, according to JLL’s Chia.
With the majority of major launches now over this year CBRE’s Song anticipates that new home sales, excluding ECs to be sluggish through December. But, EC sales momentum will likely increase, helped by the sales at Tenet. A 618-unit EC in Tampines was it’s launch on the 3rd of December saw 447 units purchased within the first few hours of its launch.
Song predicts 2022’s new home sales total without ECs to be around 7,250 units, which is a 44% decrease of the 13,027 homes that were sold in 2021. “Correspondingly the home price 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 states.
Edmund Tie’s Lam estimates 2022’s new home sales, including ECs to be around 7,500 units. This, he states is the lowest annual number in the past since 7,440 homes recorded in the year 2015. “Going to 2023 we expect the housing demand to be under pressure due to the current macro-economic headwinds, the high cost of living and a slower growth prospects,” he says. Additionally, the rise in interest rates are likely to have a negative impact on affordability of housing, but Lam says that the rate of rate increases could be slower going forward which could offer “some chance of optimism” for the market.
In light of the shortage of unsold inventory in the OCR PropNex’s Wong expects the upcoming launches in the region to experience high interest because of the accumulated demand. In 1Q2023, the upcoming launches include two-68 units Sceneca Residence and five98 units of Lentor Hills Residences, and the 368-unit The Botany at Dairy Farm.