New private home sales rise nearly 71% in July, driven by AMO Residence

SINGAPORE: New private home sales in Singapore rose nearly 71 per cent in July from a month earlier as buyers returned to the market after the June holidays.

Developers sold 834 units last month - excluding executive condominiums (ECs) - up from 488 units in June, according to figures released on Monday (Aug 15) by the Urban Redevelopment Authority (URA).

On a year-on-year basis, new home sales fell nearly 48 per cent from the 1,602 units sold in July last year. 

Sales were boosted by AMO Residence in Ang Mo Kio, the sole new project launched in July and the largest suburban condominium development launched this year.

"The good sales at AMO Residence could be attributed to the severe lack of new home supply in the suburbs. There has not been a mid-size condominium launch for almost a year," said Ms Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.

About 98 per cent of the units at AMO Residence were sold on the first day of launch. 

Due to the strong sales at the Ang Mo Kio project, Ms Sun noted that the bulk of new home sales last month was from the Outside of Central Region (OCR) at 58.2 per cent or 485 units. This is followed by the Core Central Region (CCR) at 22.2 per cent or 185 units, and the Rest of Central Region (RCR) at 19.7 per cent or 164 units sold. 

The robust performance at AMO Residence should support sentiment in the property market for the rest of the year, said Ms Tricia Song, CBRE's head of research, Southeast Asia.

Citing upcoming launches such as GuocoLand’s Lentor Modern at Lentor Central (605 units) and Frasers Property’s Sky Eden @ Bedok at Bedok Central (158 units), Ms Song said these projects could see interest from upgraders and first-time home buyers who are largely unaffected by the recent round of cooling measures. 

"The market is hungry for more launches," added Huttons Asia's senior director for research Lee Sze Teck, noting that the total number of units sold has been higher than the number of units launched since February 2021.

Mr Ong Teck Hui, senior director of research & consultancy at JLL, said that the undersupply of units for sale in the market has worked to the advantage of developers in terms of sales volume and prices. 

"As new launches are limited, there is less competition, and we can see the strong 98.4 per cent take-up at AMO Residence at an optimistic median price of S$2,110 psf," he added.

This sets "new benchmark prices" for a mass-market launch, said Ms Song.

While the property market will continue to face headwinds from rising global inflation, interest rate hikes and supply chain disruptions, the interest rate hike did not seem to have a significant impact on buying sentiment for new homes, said Ms Sun. 

"Home buyers may not feel the increase in monthly instalments due to the progressive payment schedule for new launch private properties, and home loans tend to be smaller in the initial repayment period," she added.
 
"Borrowers may experience a more substantial increase when a project obtains TOP (Temporary Occupation Permit) which is around three to four years later. The borrowing climate may have changed by then and home owners may refinance their packages or lease out their units to offset the higher monthly mortgages."