New private home sales down again in December; record low of 45 units launched

SINGAPORE: New private home sales fell for a third consecutive month in December, amid a lack of launches, interest rate volatility and the typical year-end lull in the market.

Excluding executive condominiums (ECs), developers sold 170 units in December, down from 260 the previous month, data from the Urban Redevelopment Authority (URA) showed on Monday (Jan 16). This was as the number of units launched for sale dropped to just 45.

Huttons Asia's senior director for research Lee Sze Teck said December 2022 has set "the record for the slowest month ever".

"Developers sold 170 units in December, 34.6 per cent lower month-on-month and 73.8 per cent lower year-on-year," he said.

"Developers launched only a paltry 45 units for sale in December. This is the lowest number of units launched for sale since URA started reporting the data in June 2007."

One Global Group senior analyst for research and content creation Mohan Sandrasegeran said: "The drop in new home sales was likely a result of the absence of major new project launches, volatile nature of interest rates and the housing market's typical slower activity during the holiday season."

The Government introduced a set of property cooling measures on Sep 30 last year, following an earlier round in December 2021.

CORE CENTRAL REGION MOST POPULAR AGAIN

Of the 170 units sold in December, a majority – 89 – were in the Core Central Region (CCR). A total of 54 units in the Rest of the Central Region (RCR) were sold, while the Outside Central Region (OCR) saw 27 units sold.

"This is the third month that sales in the CCR accounted for more than half of the monthly sales," Mr Lee said.

He added that the proportion of sales to foreigners picked up further in December, to 22 per cent.

OrangeTee & Tie's senior vice president of research and analytics Christine Sun pointed out that 10 new non-landed homes sold for more than S$5 million in December.

"Only one transaction breached the S$10 million mark: A 2,368 sq ft unit at Klimt Cairnhill transacted for S$10,098,000 or S$4,264 psf," she said, citing URA Real Estate Information System data.

A "SETBACK"

Mr Mohan said private home sales encountered a "setback" in 2022.

"Barring the final tally of the fourth quarter of the private new home sales transactions that will be released on Jan 27, the number of the total new home sales – excluding ECs – in 2022 declined to 7,153 units – a 45.1 per cent year-on-year drop as compared to the 13,027 units sold in 2021," he said.

"One of the primary factors for the decline in new home sales was due to the lack of major new project launches during the year."

He added that most projects launched in 2022 were smaller condominium ones and boutique-sized.

Ms Sun said home sales for the year were at their lowest level since 2008, when 4,264 homes were sold.

2023 FORECASTS

Mr Mohan said pent up interest for projects in good locations would likely have a significant influence on new home sales in 2023.

"This trend is already evident in the success of the first new launch project, Sceneca Residence which sold 60 per cent of units on the launch day, demonstrating a strong appetite for well-situated properties," he said.

The strong sales at the Tanah Merah condominium "should dispel doubts about the strength of the market and set the tone for the upcoming launches" in February and March, said Mr Lee.

He added that Gems Ville, The Botany at Dairy Farm and Terra Hill are likely to open their showflats during the Chinese New Year period, and highlighted good responses to previous launches in the same areas.

Ms Sun said a significantly higher number of large projects would be launched in 2023 compared to the last two years.

"This year, more projects will be launched for sale. Over 11,000 new homes, excluding ECs from more than 45 projects, could be launched," she said.

"Up to seven large projects with more than 500 units may be launched, which is in stark contrast to one such launch in 2022 and four in 2021.

"Some of the large projects include the integrated development at The Reserve Residences, Tembusu Grand, The Continuum and Lentor Hills Residences. Other notable launches include the AXA Tower redevelopment, Newport Residences and the Marina View GLS."