SINGAPORE, 18 April 2022 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on URA’s new private home sales.
Developers moved 654 private residential units (excluding ECs) in March 2022, 24.1% higher than the revised figure of 527 units in February 2022. Despite a lack of new projects launched within the month, newly launched units amounted to 309 units in March 2022, almost 60% higher than February 2022’s 194 units. Although the take-up rate stood at close to 200% in March, it was a noticeable decline from the significantly higher take-up rates of 382% and 272% recorded in January and February respectively, suggesting that sales momentum have softened amid the heightened economic uncertainties.
The Rest of Central Region segment accounted for almost half of total sales for the month, with the balance of sales fairly evenly split between Core Central Region (23.4%) and Outside Central Region (27.7%). Consequently, the take-up rates were most buoyant at over 300% in both the RCR and the OCR, as homebuying demand were concentrated on more affordable homes in the fringe and suburbs.
Based on our analysis of the caveats, price increases were strongest in the RCR during March and the first quarter of the year, while being contained in the CCR. Within the CCR, the top-selling projects were The Avenir and Leedon Green. Each project sold 23 units during the month and collectively accounted for 30% of the segment’s sale. The median price of units sold at Leedon Green inched up slightly in March, while that of units sold at The Avenir were lower by 1% compared to the preceding month.
Within RCR, the top-selling projects were Normanton Park, One Pearl Bank and Avenue South Residence, which collectively accounted for 40% of the segment’s sales during the month. Price increases correlated well with the sales progress of the projects. For instance, at Normanton Park and Avenue South Residence, which are both over 90% sold, median prices of units sold in March 2022 were about 3% higher than last December’s while the median price of One Pearl Bank (76% sold) was broadly unchanged over the same period.
Price pressures were somewhat stronger among the top-selling projects in the OCR in March. Among the top six projects, four projects (Ki Residences at Brookvale, Affinity at Serangoon, Sengkang Grand Residences, The Watergardens at Canberra) saw higher median sales price in Marched while two projects (The Florence Residences, Midwood) recorded lower pricing.
Our analysis of the caveats showed that, in terms of buying demand by unit size, the strong pace of price increases in RCR likely contributed to greater demand for units below 700 sq ft in March (32% of total units) compared to February (24%). A third of homes sold in the RCR were priced in the $2,500-3,000 psf range, compared to just 13% in February. Over 48% of homes sold in the RCR in March were priced at least $2million, compared to 40% in February.
In the OCR, buying demand gravitated towards larger units of 1,000 sq ft or more, owing to greater affordability in the suburbs. The bulk of the purchases in the OCR were for units priced between $1.5million to $3million; 75% in March compared to 60% in February.
We remain relatively sanguine on the property outlook; ongoing geopolitical uncertainties and softer economic growth in the first quarter are balanced by a tight labour market and resilient household balance sheets. Overall unsold inventory remains tight, and some price increases are still expected in various pockets with especially tight supply relative to demand. We expect the RCR and OCR to account for the bulk of sales for this year, as the cooling measures divert some demand to these segments. Launch and sales momentum are expected to pick up from the second quarter of this year, especially as some sites are expected to benefit from pent-up demand in their locality. There should most likely be continued pricing growth in the OCR and RCR, the cumulative sold rate in these segments stood at 91.2% and 84.7% respectively. On the other hand, price pressures are expected to be more contained in the CCR with an unsold rate of 46%.
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