The absence of new condo releases is mostly to blame for the slump in sales of new private homes in August

Sep 15, 2022

As a result of developers delaying the introduction of new houses during the Hungry Ghost month, the number of private homes that were sold in August fell to roughly half of the amount that was sold the previous month. This is a time of year when sales activities often slow down.

According to statistics that was made public by the Urban Redevelopment Authority (URA) on Thursday, developers sold a total of 437 units, excluding executive condos (ECs), representing a decrease of 47.6 percent when compared to the 834 units that were sold in July 2022. (Sep 15).

In the meanwhile, developers only introduced 134 units, which is a decrease of 66.7 percent compared to the 402 units launched the previous month.

In comparison to the 846 units that were sold in July and the 402 units that were launched, only 448 units, including ECs, were sold in August, while 134 units were introduced.

"The private home market is in a peculiar situation at the moment," said Leonard Tay, who is the head of research for Knight Frank Singapore. "[T]here is a lot of uncertainty."

Even though there is a large amount of demand from HDB upgraders and those starting new families, the supply of new private houses is still somewhat limited, which keeps transactional volume low.

According to Wong Siew Ying, head of research and content at PropNex Realty, in the absence of fresh mass-market launches, developments located in the core centre region (CCR) have taken up the slack.

"The CCR sub-market, which is typically seen as a proxy for the luxury housing segment, was responsible for accounting for half of the new home sales in August," she noted.

According to the statistics provided by the URA, the city core area (CCR) had the highest number of sales during the month with 220 units, followed by the remainder of the central region (RCR) or city periphery with 127 units, and then the outer central region (OCR) with 90 units.

It is possible that this region's outperformance might be attributed to the fact that the CCR witnessed the majority of launches (77.6 percent) with 104 units launched. In comparison, there were 24 new launches in the RCR whereas there were just 6 new launches in the OCR.

According to Lam Chern Woon, head of research and consulting at Edmund Tie, the gravitation of demand toward CCR projects also occurs as a result of the recovery of international demand that has taken place since the reopening of the borders.

Additionally, he mentioned that there was "noticeably hard" pricing competition among the top 10 selling projects in August, particularly in the CCR. In August, the median sales price was higher for seven of these 10 projects (Hyll on Holland, Perfect Ten, The Hyde, Leedon Green, One Pearl Bank, The Avenir, and The Landmark), while the median sales price was lower for the other three projects (The Landmark and The Avenir).

According to data provided by URA Realis, the number of condominiums, excluding executive condominiums, that were purchased by foreign purchasers increased by 40.4% to 59 units in August, up from 42 units in July.

Lee Sze Teck, the senior director of research at Huttons Asia, made the observation that the majority of the top projects that made sales to outside buyers during the month were located in the CCR.

Looking forward, Due to the debut of condo projects such as Sky Eden @ Bedok and the highly anticipated integrated complex, Lentor Modern, Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, anticipates a resurgence in sales volume in September.

"Inflation and rising interest rates do not appear to have a substantial influence on the property market," Sun added. "[T]here does not appear to be a significant impact."

In contrast, the head of research at CBRE South-east, Tricia Song, anticipates that transaction volume will decline for the remainder of the year as a result of the continued rise in interest rates, which has dampened purchasing mood.

She has not changed her projection for the number of new homes that will be sold in 2022, which is 9,000 units. This is in comparison to the 13,027 new homes that were sold in 2021.