SINGAPORE: Sales of new private homes in Singapore more than doubled in the first month of 2023, amid new launches and the return of mainland Chinese buyers to the property market.
Excluding executive condominiums (ECs), developers sold 391 units in January, up from 170 the previous month, data from the Urban Redevelopment Authority (URA) showed on Wednesday (Feb 15). The number of units launched for sale shot up from 45 in December 2022 to 410.
"Sales were healthy, considering most show flats were closed during the Chinese New Year period," said Ms Christine Sun, senior vice president of research & analytics at OrangeTee & Tie.
The sole fresh project launch of the month, Sceneca Residence, accounted for the sale of 157 units, or 40.2 per cent of the total month's sales.
It was the first major non-landed private residential launch after the Government implemented a round of cooling measures for the property market in September 2022.
"The good sales take-up shows a pent-up demand for housing units, especially in the suburbs where supply remains tight. This is despite the high-interest rates and cooling measures implemented in September 2022," said Ms Sun.
Even without the launch of Sceneca Residence, more units were sold in January than in the month before, "proving that the record low sales in December was a blip", Huttons Asia's senior director for research Mr Lee Sze Teck said.
"On a year-on-year basis, sales were 42.8 per cent lower."
OCR THE MOST POPULAR REGION
Of the 391 units sold in January, the Outside Central Region (OCR) accounted for a majority at 185 units, mainly thanks to the launch of Sceneca Residence. A total of 158 units in the Core Central Region (CCR) were sold, while the Rest of the Central Region (RCR) saw 48 units sold.
"Contrary to the OCR and CCR, the RCR registered a decline in sales in January; but this is most likely due to RCR seeing only 105 new units launched, on the back of a dearth of new project launches," said Mr Lam Chern Woon, head of research and consulting at Edmund Tie.
"The spike in sales for the OCR can be attributed to the fact that 270 new units were launched in this segment, compared to just 35 and 105 new units in the CCR and RCR, respectively."
At the upper end of the market, 28 new non-landed homes sold for at least S$5 million last month, said Ms Sun.
She pointed out that two units transacted for more than S$10 million; a 4,661 sq ft unit at Dalvey Haus which sold for S$16,280,000 or S$3,493 psf and a 3,272 sq ft unit at Midtown Modern which sold for S$14 million or S$4,278 psf.
THE RETURN OF FOREIGN BUYERS
The relaxation of border controls by China on Jan 8 saw the return of super wealthy Chinese property buyers to Singapore, said Mr Lee.
Foreigners picked up 57 units in January, 58.3 per cent higher than December.
"The super wealthy Chinese were said to be behind some of the purchases in Klimt Cairnhill in January, pushing the project to become the number three bestselling project in January."
Fourteen out of the 17 units at Klimt Cairnhill sold last month went to foreigners.
"One of the reasons why the Chinese zoomed in on Klimt Cairnhill was the availability of large units which were more than 2,000 sq ft. 15 of the 17 units sold at Klimt Cairnhill were above 2,000 sq ft," said Mr Lee.
Mr Lam said that he expects the share of foreign purchases to inch up in 2023, with demand from Mainland Chinese for private homes in Singapore to gradually recover in 2023.
"The potential return of well-heeled Mainland Chinese investors would likely drive demand for private homes, especially in the prime and city fringe areas."
OUTLOOK FOR 2023
Private home sales should regain momentum on the back of several post-Chinese New Year launches in the first quarter of the year, said Ms Chia Siew Chuin, head of residential research at JLL Singapore.
"Pent-up demand from potential buyers who sat out of the market due to limited options available in 2022 are expected to return to pick up units from an increased line-up of project launches this year."
The Budget delivered by Finance Minister Lawrence Wong on Tuesday announced a rise in the buyer’s stamp duty (BSD) for higher-value properties.
For homes, the portion of the value in excess of S$1.5 million and up to S$3 million will be taxed at 5 per cent, up from the current rate of 4 per cent.
The value of the property in excess of S$3 million will be taxed at 6 per cent.
The marginally higher BSD "is unlikely to hurt homebuying demand for mid- and high-end properties, although buyers in the mass-market segment will be more price sensitive", said Ms Chia.
"Some of them may need more time to re-evaluate financing arrangements while others could monitor the market before making commitments."
About 10,000 to 12,000 units are expected in a "healthy pipeline" of new private home launches in 2023, according to Ms Tricia Song, head of research in Southeast Asia at CBRE.
New launches in the first quarter of the year include RCR projects Terra Hill, the redevelopment of Flynn Park and Blossoms by the Park, said Ms Song. The Botany at Dairy Farm and Lentor Hills Residences are also expected to launch in the OCR.