Developers sell 673 private homes in January, up 3.5% m-o-m

By Atiqah Mokhtar / EdgeProp Singapore | February 15, 2022 4:37 PM SGT
Belgravia Ace, one of two new launches in January, saw a take-up rate of 90.6% (Photo: Samuel Isaac Chua/The Edge Singapore)
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SINGAPORE (EDGEPROP) - Sales of new private residential units inched upwards by 3.5% m-o-m in January, with developers selling 673 new homes excluding executive condominiums (ECs) compared to 650 units in December 2021.
Including ECs, new home sales rose 0.8% m-o-m from 719 units in December 2021 to 725 units in January.
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Compared to a year ago, new home sales excluding ECs were 58.8% lower y-o-y.
Consultants say the marginal increase in new home sales in January reflects the continued tentativeness in the market following the new cooling measures that came into effect last December. In addition, there was also a lull period leading up to the Chinese New Year period.
Only two new project launches occurred in January, the 107-unit strata-landed Belgravia Ace and the 16-unit Ikigai. In total, 178 units were launched by developers in January - the lowest since February 2021 when 167 units were launched.

Encouraging performance

Notwithstanding the low number of launches, consultants are generally upbeat on the underlying strength of the private residential market.
Christine Sun, senior vice president of research & analytics at OrangeTee & Tie, notes that while new home sales in January was much lower on a y-o-y basis, this was due to major launches that occurred in January 2021 including the 1,862 unit Normanton Park and the 429-unit The Reef at King’s Dock.
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“The high sales volume in January 2021 was an anomaly. From 2014 to 2020, the total new home sales excluding EC for the month of January ranged between 324 and 620 units,” she points out.
In addition, the consultants highlight the performance of Belgravia Ace, which saw a 90.6% take up rate for its 85 units launched in January. Wong Siew Ying, head of research and content at PropNex Realty, notes that the strata landed units were sold for more than $4 million each, reflecting the strong demand and ample liquidity in the market.
Leonard Tay, head of research at Knight Frank Singapore, notes that projects like Belgravia Ace which have popular selling points and locational attributes will still perform well in terms of sales as there are still many genuine homebuyers purchasing for their own occupation.
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“The stock of landed properties in Singapore has stagnated around 73,000 plus units in the last four years and is not expected to grow substantially in future. Due to the combination of these factors, landed and strata landed projects will continue to capture demand despite government measures,” he adds.
Other best-selling projects include Normanton Park, which recorded the highest number of units sold in January at 94 transactions with a median price of $1,841 psf, as well as Woodleigh Residences, Dairy Farm Residences, and The Florence Residences.

Top 10 best-selling projects in January 2022 (excluding ECs)

Top 10 best-selling projects - EDGEPROP SINGAPORE
Most transactions in Januuary (excluding ECs) were in the Rest of Central Region (RCR), with 429 units or 42.9% of transactions. This was followed by the Outside of Central Region (OCR) at 275 units or 40.9% of transactions, and the Core Central Region at 109 units or 16.2% of transactions.
Nicholas Mak, ERA Realty’s head of research & consultancy, also points out that the lower launch volume in January resulted in a much higher take-up rate. “The private housing take-up rate (ratio of number of units sold to units launched) jumped from 170% in December 2021 to 378% in the following month,” he highlights.

Milder impact from current round of cooling measures

For OrangeTee & Tie’s Sun, the current round of cooling measures seem to have had a milder impact on the new sale market compared to past cooling measures.
“For example, after the implementation of new Additional Buyer’s Stamp Duty measures in January 2013, sales volume (excluding ECs) dropped by 64.9% from 2,028 new homes sold in January 2013 to 712 units in February 2013,” she points out.
Likewise, new home sales (excluding ECs) plunged 64.2% from 1,724 units in July 2018 to 617 units in August 2018 after new cooling measures took effect on July 6, 2018.
Given the rise in new homes sold in January, Sun is optimistic that the market will bounce back in the coming months.
“Developers are gearing up to launch more projects after the Chinese New Year festivities. As the dust settles after new cooling measures have been implemented for two months, some buyers may start to stream back to the market with more market clarity,” she says.
Other consultants echo Sun’s sentiment. “Looking at past trends, the performance in January perhaps offers some hope that the demand for new private homes has not been severely hit by the new cooling measures,” says PropNex’s Wong.
Momentum in the private residential is anticipated to pick-up in the second half of the year. Knight Frank’s Tay estimates that new sale volume could reach around 8,000 to 9,000 units in 2022 with fewer launches in the pipeline, while 16,000 to 19,000 units might be sold in the resale market driven primarily by owner-occupier demand.
“Owner occupiers, looking to upgrade and right-size, are generally unaffected by ABSD revisions and will surely comprise the majority of buyers in 2022,” he comments. ERA’s Mak also points out that a record number of 35,000 HDB flats will reach the end of their minimum occupation period in 2022, adding on to the pool of potential upgraders’ demand. (Find HDB flats for rent or sale with our Singapore HDB directory)
Tay is projecting overall private residential prices to pick up moderately sometime in 2Q2022 and thereafter increase by about 1%-3% for the whole of 2022.
Upcoming launches include the 32-unit freehold Royal Hallmark along Haig Lane, which is likely to launch this month. Tay believes the project may see good interest from buyers, considering the limited supply of larger homes in the vicinity as well the project’s attractive price from around $1,700 psf.
Other upcoming launches include the 105-unit The Arden on Phoenix Road that may hit the market in March. Meanwhile, North Gaia EC is also expected to be rolled out for sale sometime next month. “These new launches should attract buyers’ interest given the dwindling stock of unsold new private homes in the RCR and OCR,” comments PropNex’s Wong. (Browse newly launched condos in Singapore right now)

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