SINGAPORE, 16 October 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 September 2023.
New private home sales (exclude ECs) fell by 44.9% mom to 217 units for the second straight month in September 2023. This is the lowest since December 2022, due to a dearth in new project launches. Developers have held back on launches on the back of a surge in new project launches in the past few months, while some homebuyers may also become increasingly selective, amid a multitude of options currently available in the market.
The CCR accounted for 35% of total sales in September, while the RCR and OCR accounted for the remaining 33% and 32%, respectively. Units launched plunged by 88.5% mom in September to 68 units, significantly lower than August’s 590 units, which translates to a higher overall take-up rate of 319% in September, compared to 67% in August.
In the CCR, Pullman Residences Newton (21 units), Midtown Modern (9 units) and One Bernam (9 units) contributed to 51% of the segment’s sales. In the RCR, Grand Dunman (16 units), The Reserve Residences (11 units), and The Continuum (10 units), accounted for 52% of the segment’s sales. In the OCR, Lentor Hills Residences (17 units), The Myst (8 units) and Pollen Collection (8 units) contributed to 47% of the market segment’s sale in the month.
Upward price pressures were observed to have slightly built up among the 10 top-selling projects in September. Among the top 10 top-selling projects, 6 projects (Lentor Hills Residences, Grand Dunman, The Continuum, Midtown Modern, The Myst and The Landmark) saw higher median sales price in September. This is compared to August which saw 5 projects (Grand Dunman, One Pearl Bank, The Myst, One Bernam and Pinetree Hill) with higher median sales prices.
The 6 top-selling projects in September saw prices rise by 4.7% m-o-m on average, while the 2 other projects saw prices decline by 1.3% m-o-m on average. 2 projects (Pullman Residences Newton and Pollen Collection) saw no price changes in September.
In the primary market, demand gravitated towards larger units as the share of units sized at 1,000 sq ft and above rose to 42% in September, following 31% in August. Consequently, the share of units priced at S$2.0 million and above accelerated to 63% in September, following 46% in August, due to a growing appetite for larger private homes.
Post-ABSD hikes in April, foreign demand appeared to have found a footing in July. The share of overall (new and secondary) purchases of private homes by foreigners rose to 2.6% in September, following 2.0% in August and 1.5% in July. In particular, the share of foreign purchases rose more noticeably in the RCR segment to 2.9% in September, up from 2.0% in August, due to a widening of price gap between CCR and RCR in September. RCR new sales median price fell by 2.6% m-o-m to S$2,546 psf in September, while CCR new sales median price accelerated by 9.8% m-o-m to S$3,130 psf.
Looking ahead, with a lineup of launches expected in the final quarter of this year, we remain cautiously sanguine on the sales outlook. Developer sales are expected to reach between 6,500 to 7,500 units, following 7,099 units in 2022. As interest rates stay elevated in the second half of this year coupled with the soft economic outlook, this would curtail housing demand, and secondary sales volumes may reach 10,000 to 11,000 units, down from 2022’s 14,791 units. The softer public resale housing market may also temper upgrader demand for private homes. The juxtaposition of property prices growth and slower transaction volume in Q3 2023, may lead to prices trading sideways in the next few months. Overall, prices are poised to rise at a more sustainable pace of 3-5% this year, following 2022’s 8.6%. Interest rates are unlikely to turn south significantly in 2024, and the property market outlook next year would hinge largely on the pace of economic growth.
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