New launches in 2Q2022 break private residential market out of stalemate: Knight Frank

/ EdgeProp Singapore
July 18, 2022 5:06 PM SGT
Sales of non-landed private homes excluding executive condominiums surged 25.9% q-o-q in 2Q2022
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SINGAPORE (EDGEPROP) - New launches underpinned a surge in private homes transacted in Singapore in 2Q2022, according to a report by Knight Frank. Sales of non-landed private homes excluding executive condominiums (ECs) totalled 5,844 units in 2Q2022, surging 25.9% q-o-q.
New sales spiked 43.1% q-o-q in 2Q2022 to reach 2,383 units, rebounding from the 42.6% q-o-q drop recorded in 1Q2022. Resale transaction volumes also grew after two consecutive quarters of decline, with 3,461 units transacted in 2Q2022, up 16.3% q-o-q.
According to Knight Frank, the higher sales volume marks a resumption in market activity following the “state of pause” caused by property cooling measures that came into effect last December. Excluding ECs, four new developments were launched in 2Q2022, adding 760 new units to the market. In contrast, only 48 units were launched in the previous quarter.
Prices of non-landed private homes have also started growing again, charting a 3.3% increase q-o-q, based on URA flash estimates released on July 1. This marks a rebound from the 0.3% q-o-q dip recorded in 1Q2022.
Prices of non-landed private homes grew the most in the Rest of Central Region (RCR), where they increased 6% q-o-q in 2Q2022 compared to the 2.7% decline in the previous quarter. The increase in prices was supported by new launches including the 407-unit Piccadilly Grand and the 298-unit Liv@MB. The two projects accounted for 42.6% of the 1,305 new units sold in the RCR.
Supported by the new launches, new units sold in the RCR surged 60.7% q-o-q in 2Q2022, while average new sale prices increased by 8.5% q-o-q to $2,305 psf.
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In the Core Central Region (CCR), prices of non-landed private homes increased 1.6% q-o-q in 2Q2022, reversing from the 0.1% dip in 1Q2022. Knight Frank attributes the rebound to the opening of air travel lanes in April, allowing foreign buyers to buy properties in Singapore. Despite a lack of new launches, new non-landed residential transactions in the CCR increased by 73.8% q-o-q to 596 in 2Q2022, contributing to the overall q-o-q increase in total non-landed transactions in the CCR by 49.5%.
Meanwhile, the Outside Central Region (OCR) saw a 1.7% q-o-q increase in non-landed home prices in 2Q2022, easing from the 1.9% growth recorded the previous quarter. New units totallings 482, and 1,774 resale units, were sold in 2Q2022, representing a 5.5% q-o-q decline and a 5.7% q-o-q increase respectively.
Looking ahead, Knight Frank views that market activity could taper in the coming months, given rising interest rates which may impact home-buyer affordability. Nonetheless, demand continues to outpace supply — an encouraging sign for developers. “Buyers have shown an unanticipated resilience, the kind that will now embolden developers to launch projects to tap this buyer demand before interest rates rise further,” says Nicholas Keong, Knight Frank Singapore’s head, private office.
Overall, Knight Frank expects private residential prices to increase around 5% to 7% for the whole of 2022, against the initial conservative forecast of 1% to 3% growth when the cooling measures were first announced in December 2021.
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