Sales Drop due to Absence of New Condo Launches in 2022

Every month, The Urban Redevelopment Authority (URA) releases a comprehensive database of developer sales for private new homes. Ohmyhome analyses this huge chunk of data and picks out the most relevant points and trends for readers.  

New private home sales declined by 22.5% (m-o-m) in February on the backdrop of Chinese New Year festivities and lack of major new project launches. With ongoing global uncertainties as a result of the Russian-Ukraine dispute and the likelihood of a rise in interest rates, buyers and investors might exercise caution as well.

Developers sold a total of 527 units (excluding ECs), as compared to the 680 units transacted in January. Sales tumbled across all market segments. With the Outside Central Region (OCR) accounting for the highest drop of 42.9%. 

A total of 194 units were launched in February. Typically, developers are cautious in releasing new project launches during the Chinese New Year period. 

The freehold Royal Hallmark was the only new condominium project launched last month. While, about 83% of the projects were those that were previously launched.

With a total of 372 units launched in the first two months of 2022, as compared to the 2,767 units launched in 2021. This is an 86.6% difference in units launched. 

As this is due to a lack of any mega launches so far. Whereas, the 32-unit EC sales in February is encouraging, given that 5 consecutive months have passed without launches of EC units. 

Normanton Park continues to be the Hot Favorite

Given the paucity of new launches, February’s best-selling new private residential projects were projects that have been previously launched. 

With the top selling project for the month of February being Normanton Park. The project transacted a total of 85 units at a median price of $1,855 psf. Over 89% of units have been transacted so far.

While, both Dairy Farm Residences and Avenue South Residence sold a total of 32 units at a median price of $1,716 psf and $2,371 psf respectively. 

Among the top 10 projects, One Pearl Bank had the highest median price decrease between January and February. Declining from a median price of $2,593 psf in January 2022 to $2,334 psf in February 2022. A 10.0% drop in median unit prices.

Purchases made by foreigners remain credible 

Despite the hike in ABSD rates, new private home purchases made by foreigners have remained credible. With only a marginal dip between January and February. As the number of transactions by foreigners decreased from 28 units sold in January to 26 units transacted in February. 

It is also worth noting that about 19% (5 out 26 units sold) of foreigners bought properties in the OCR segment. 

The projects from OCR include Infini At East Coast, Ki Residences At Brookvale, Midwood and Parc Clematis. As properties in the OCR segment are relatively more affordable as compared to the other two segments.   

Outlook

We expect market sentiment for the private new sale market to remain positive in the coming months. Although we anticipate new sales to rebound in March, we expect a modest growth in view of the March school holidays. 

Recent tender results for government land sale sites, reflects general optimism among developers. With Chinese New Year in the rear view, developers will likely be moving forward with their new project launches. With upcoming projects such as North Gaia (EC) and Piccadilly Grand. 

We expect favorable demand for these 2 projects. There have been no new EC projects launches since September 2021. And the last EC launch in the Yishun area was in 2015, and the projects were Signature At Yishun and The Criterion. With the expected pent-up demand in the Yishun area, we can expect North Gaia to be well received by buyers when it is officially launched. The benefits of owning an EC are noteworthy, in terms of lower prices and capital appreciation in the long run. 

For Piccadilly Grand, its offerings of more units in the development, exceptional locational attributes and with limited number of new launches in the area, we expect a fair amount of interest for the development as well. 

We expect new sales to be likely in the range of 2,000 to 2,300 in the first quarter of 2022. With recovering economic sentiments, Singapore’s on-going efforts towards the further opening of the vaccinated travel lanes (VTLs) and Singapore’s strong immunization coverage, we expect demand for new private home sales to remain healthy. 

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Header Image: Kingsford Huray Development Pte. Ltd