Oct new home sales at two-year low as fewer projects launched

Nov 16, 2022

Leonard Tay, head of research at Knight Frank, points to the popularity of Copen Grand as evidence that “homebuyers are hungry for new products”.

SALES of new private homes slipped to a two-year low in October, reversing the previous month’s uptick as the number of newly-launched units also fell to their lowest point in four years.

Excluding executive condominiums (ECs), 312 private homes were sold in October, representing a 68.4 per cent decline from the 987 units sold in September and a 65.8 per cent decline year on year.

According to data released by the Urban Redevelopment Authority (URA) on Tuesday (Nov 15), more than half of these units sold in October were in the Core Central Region (CCR), with 171 units sold. This was followed by the city fringe, or the Rest of the Central Region (RCR), with 81 units sold, and the suburbs or Outside Central Region (OCR) with 60 units sold.

Meanwhile, the number of newly-launched units, also excluding ECs, fell to a four-year low of 102. This represents an 88.8 per cent decrease from the previous month, when 913 units were put on the market.

Including ECs, just 810 units were sold in October, a decline of 18.3 per cent from the 992 units sold in September and down 22.7 per cent from a year ago.

There were only three major launches in the month: Copen Grand, an EC in the Tengah estate; the Pollen Collection, a landed development; and Enchante, a boutique project at Evelyn Road. The latter two launches comprise a small number of units.

Commenting on the dearth of new launches, Leonard Tay, head of research at Knight Frank, pointed to the popularity of Copen Grand, which sold 73 per cent of its units on the day of its launch, as evidence that “homebuyers are hungry for new products”.

Copen Grand represented 59.3 per cent of all developer sales in October, including ECs.

Besides the lack of major launches, senior director of research at Huttons Asia Lee Sze Teck also attributed the low sales in October to “critically low” unsold stock, with an estimated 2,031 unsold units as at end-October.

The best-selling project in October was Perfect Ten, located in the CCR, with 37 units sold. Other CCR projects, including Pullman Residences Newton and The Avenir, were also among the most popular projects in the month, with 13 and 10 units sold, respectively.

Lee noted that the high number of CCR sales in October has led to an increase in the proportion of sales over S$2 million, at 64.4 per cent compared to 39.4 per cent in September. He added that while the number of sales below S$1.5 million has dipped to an all-time low of 11 per cent, this is “not surprising” given the limited supply of unsold units in this price range, and that projects in the market have exceeded this price point.

The latest round of property cooling measures that came into effect on Sep 30 was highlighted as a bane for sales in October. ERA chief executive Marcus Chu said buyers needed time to “examine their financial status more closely, in order to assess the effects of the property curbs on their home acquisition plans”.

Knight Frank’s Tay also flagged rising interest rates as another factor that might cause buyers to adopt a “watch-and-wait approach”.

However, Mohan Sandrasegeran, senior analyst at One Global Group, said the higher interest rates might be driving the increasing popularity of more affordable ECs. Units of Copen Grand sold at a median price of $1,345 per square foot (psf), compared to the median price of $2,955 psf for units sold in Perfect Ten.

Looking ahead, Huttons’ Lee estimates that, with no foreseeable major launches in the remaining months, full-year sales for 2022 will not exceed 7,500 units.

While sales volumes could remain subdued until the end of the year, ERA’s Chu noted that some developers are planning to launch new projects after Chinese New Year.

“This would result in a jump of primary market launch and sales activities, signalling a recovery in the Singapore property market,” he added.