SINGAPORE, 15 March 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on the developer sales in February 2023.
New private home sales (exclude ECs) climbed 9.9% m-o-m in February to 432 units, fuelled by the launch of Terra Hill in the RCR, where 97 units were sold and contributed to 22% of the total month sales. The respectable sales of Terra Hill were due to its freehold tenure, proximity to the Pasir Panjang MRT station, and the development of the future Greater Southern Waterfront. In addition to the 270-unit Terra Hill launch in February, the month also saw the launch of the 24-unit Gems Ville, which is also located in the RCR.
The CCR accounted for about half (51%) of total sales, while the RCR and OCR accounted for 38% and 11%, respectively. Units launched dipped in February to 401 units, lower than January’s 410 units, which translates to a higher take-up rate of 108% in February compared to 96% in January.
Contrary to the RCR and the CCR, OCR registered a decline in sales in February, as no new units were launched. The CCR recorded the highest take-up rate of 208% given the relatively muted impact of the tighter financing conditions. Homebuyers are also swooping in on properties in this segment which offers better relative value.
In the RCR, sales were contributed by Terra Hill (97 units), which contributed to 60% of the segment’s sales. In the CCR, sales were contributed by projects such Pullman Residences Newton (38 units), Leedon Green (21 units) and Perfect Ten (20 units), accounting for 36% of the segment’s sales. In the OCR, sales were contributed by projects such as The Gazania (12 units), The Lilium (6 units) and Urban Treasures (5 units) which accounted for 49% of the market segment’s sale in the month.
Among the top 10 best-selling projects (which includes Terra Hill) islandwide, seven were in the CCR, another two were in the RCR, with the remaining one is in the OCR. These 10 top-selling projects in February also saw downward pressures on prices; among them, only four projects (Pullman Residences Newton, Perfect Ten, One Bernam and The Gazania) saw higher median sales price in February, as compared to January. These four projects saw prices rise by 2.1% m-o-m on average in February, while the five other projects saw prices decline by 4% m-o-m on average.
We expect greater fervour in launch momentum from the second quarter of this year, after the market has digested more fully the impact of last September’s cooling measures, and the more recent increase in marginal Buyer Stamp Duty (BSD). Buyers are likely to remain price-sensitive, especially for projects in the fringe and suburban areas as financing costs remain relatively elevated. Coupled with the ongoing economic uncertainties, upward price pressures for future launches are likely to be contained, except for projects with exceptional locations and design attributes. Overall, sustained by a relatively tight labour market and pent-up organic demand, primary sales are still expected to recover to around 8,000-9,000 units as more launches come onstream.
Post-Budget 2023, higher marginal BSD rates now applies to the portion of residential properties value in excess of S$1.5 million. This may cause some slight knee-jerk reactions in the high-end property market. However, the potential return of Mainland Chinese investors would likely sustain demand for high-end properties, especially those located in the prime and city fringe areas.
ENDS
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