EDMUND TIE’s comments: Developer sales – May 2023
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  • 15 June 2023

EDMUND TIE’s comments: Developer sales – May 2023

SINGAPORE, 15 June 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on URA’s announcement on developer sales in May 2023.

New private home sales (excluding ECs) rose by 17% MoM in May 2023 to 1,038 units, the highest in 12 months since May 2022. New private home sales were driven by two new project sales in the RCR – The Reserve Residences and The Continuum – where 748 units were moved and contributed to about 72% of the monthly sales.  Consequently, the RCR accounted for about 81.6% of total sales in May, while the CCR and OCR accounted for the remaining 14.6% and 3.8%.

Units launched doubled in May to 1,595 units from April’s 798 units, and the take-up rate of 65% in May was the lowest in over two years. The CCR continued to record the strongest take-up rate among the market segments for the sixth consecutive month at 149% in May, as the attractively narrow price gap between CCR and RCR of around S$400 psf drew value hunters to the prime segment.

In the RCR, sales were contributed by The Reserve Residences (523 units) and The Continuum (225 units). Collectively, new homes sales in these two projects accounted for 88% of the segment’s sales. The stellar reception for The Reserve Residences was a function of a few factors: pent-up demand for the first mixed-use project integrated with a transport hub in the locality, the bountiful spread of amenities and popular schools in the neighbourhood, attractive price point and sustained upgrading demand. Not only did it attest to the health of the mass market property segment, but it also gave a much-needed shot in the arm to market sentiment in the aftermath of the cooling measures. We expect developers to be emboldened to push ahead with launches in the coming months, but households are still highly price sensitive and will refrain from over-extending themselves, given the vagaries of the overall economic environment and interest rate trajectory; the GDP growth forecast for this year has just been slashed from 1.9% to 1.4%, while the Fed is still unequivocal on further hikes ahead.

In the CCR, sales were contributed by projects such as The Atelier (22 units), Pullman Residences Newton (16 units) and Leedon Green (14 units), accounting for 34% of the segment’s sales. In the OCR, sales were contributed by projects such as The Botany at Dairy Farm (16 units) and Lentor Modern (6 units) which accounted for 56% of the market segment’s sale in the month. 

Among the top 10 best-selling projects islandwide, 5 were in the RCR, 4 in the CCR, and the remaining 1 is in the OCR. Price pressures picked up among the 10 top-selling projects in May. 6 projects (The Atelier, Piccadilly Grand, The Botany at Dairy Farm, Pullman Residences Newton, Leedon Green and Hyll on Holland) saw higher median sales prices with an increase of 1.8% MoM on average in May as compared to 4 projects in April. 2 projects saw prices decline by 2.0% MoM on average. The remaining two projects were the two newly launched projects.

Foreign demand has unsurprisingly borne the brunt of the cooling measures, overall (new and secondary) non-landed home sales to foreigners halved to 71 units in May from 158 units in April, and the homebuying share of foreign demand fell from 5.4% to 3.7%. The foreign demand share was 9.2% at the start of the year. On the other hand, home sales to PRs held up reasonably better; although sales fell by about 25% from 400 units to 302 units, the PR share of demand picked up to 15.6% from 13.6%.

The punitive ABSD rates for foreigners have clearly caused many to pause in their tracks in their homebuying journey, while PRs buying their first homes have remained insulated from the latest cooling measures. Nonetheless, we should not overlook the group of newly minted citizens and PRs. On average, we have about 50,000 citizenships and permanent residencies granted annually. The lower-tier ABSD rates for the new residents will undoubtedly sustain further property purchases.

Looking ahead, the primary market performance for this year hinges on the reception for the next few major launches lined up such as Lentor Hill Residences in the OCR, and Pinetree Hill and Grand Dunman in the RCR. Depending on the pricing and marketing strategies for the upcoming launches, the current year-to-date new home sales tally of about 3,200 units could be boosted by another 2,000 units. We maintain our projections for about 7,000-8,000 new home sales for this year as market sentiment returns while the labour market holds up. However, the tight financing environment will continue to cap housing budgets; secondary home sales have fallen while median prices have been trading sideways for the past four months. Overall private home prices are likely to rise by a sustainable pace of 4-6% in 2023.


For further information, please contact:

Seah Li Ching (Ms)

Corporate Communications

DID: +65 6393 2510

Email: liching.seah@etcsea.com

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