New Private Home Sales More Than Doubled From December To January, Driven By A New Mass Market Project

Press Release

February 15, 2023

New Private Home Sales More Than Doubled From December To January, Driven By A New Mass Market Project

15 February 2023, SINGAPORE – Developers’ sales more than doubled in January from December, boosted by the launch of Sceneca Residence during the month. New private home sales in January came in at 391 units (ex. Executive Condos), marking a 130% jump from the 170 units transacted in the previous month. However, sales were still down on a year-on-year basis, falling by almost 43% from the 684 units shifted in January 2022. The 391 units sold in January is the highest monthly sales since 987 units changed hands in September 2022.

The Outside Central Region (OCR) segment – or mass market – led new home sales in January, transacting 185 units (ex. EC), rising sharply from the 27 units moved in the previous month. Of these, the new launch Sceneca Residence in Tanah Merah was the best-seller; it accounted for nearly 85% of the OCR sales, transacting 157 units at a median price of $2,083 psf. In a distant second is The Gazania which sold 9 units at a median price of $2,306 psf.

Over in the Core Central Region (CCR), developers saw new home sales surged by nearly 78% from 89 units in December to 158 units in January, as existing CCR launches continued to clock steady sales. The top-selling CCR project was Leedon Green which shifted 21 units at a median price of $2,957 psf. This is followed by Klimt Cairnhill which sold 17 units at a median price of $3,784 psf in the month.

New home sales in the Rest of Central Region (RCR) bucked the trend as its transaction volume declined by 11% month-on-month to 48 units in January. Once again, Riviere was the most popular RCR project, selling 13 units at a median price of $3,087 psf in January. A dearth of RCR project launches and the paring down of unsold stock in this sub-market have led to the more subdued sales in the RCR in recent months.

Meanwhile, developers sold 159 new ECs in January – down from the 468 units transacted in December, when the launch of Tenet EC had boosted sales. The top-seller in the EC segment in January was Tenet which moved 145 units at a median price of $1,388 psf.

In terms of launches, developers placed 410 new units (ex. ECs) for sale in January – up from 45 units that were put on the market in the previous month. No new ECs were launched in January.

Wong Siew Ying, Head of Research & Content, PropNex Realty:
“The healthy sales launch at Sceneca Residence in January could set the tone for major launches to come and it bodes well for new private home sales this year. The project alone accounted for about 40% (157 of 391 units) of developers’ sales in January. Sceneca Residence, a residential project with commercial offerings on the first storey and located a stone’s throw from the Tanah Merah MRT station sold 60% of its total units during its launch in mid-January, amid pent-up demand for mass market homes.

The sales response at project launches in the past year continues to suggest that there is genuine underlying demand. Home buyers are also discerning and price-conscious, weighing the project’s attributes against the selling price. Many buyers appear to be more willing to accept today’s launch prices if the new project is located close to an MRT station, has a wide range of amenities nearby or commercial components within the development, or is situated within an area with good growth potential.

While the high interest rates remain a key consideration for home buyers, those purchasing new homes from developers under the progressive payment scheme may feel less heat – as they will be able to pay a lower mortgage amount initially because the mortgage payment will rise gradually according to the project’s construction milestones. Meanwhile, the US Federal Reserve has dialled down on its rate hike in February, and latest data showed that US inflation has eased in January, albeit still high – signalling that the Fed would continue to raise rates. That said, some home buyers may still choose to enter the market, sensing that the most aggressive rate hikes are likely behind them, and that new launch prices are not expected to see a significant decline this year.

Based on URA Realis caveat data, the median transacted price quantum of new private homes (ex. EC) was $1.9 million in January – down from nearly $2.4 million in the previous month, as the higher OCR home sales volume likely helped to lower the overall median price. In terms of median price on a PSF basis, the CCR and OCR achieved a slight month-on-month increase from December to January, while that of RCR declined by 2.6% (see Table 1).

In the Budget 2023 announcement on 14 February, the government introduced higher marginal Buyer’s Stamp Duty (BSD) rates for higher-value residential and non-residential properties, effective from 15 February. We anticipate that the BSD changes will likely affect a good number of home buyers. Looking at URA Realis caveat data for the most recent project launches (AMO Residence, Lentor Modern, Liv @ MB, Piccadilly Grand, Sky Eden @ Bedok, and Sceneca Residence), about 65% of units sold were priced between $1.5 million and $3 million, while nearly 7% of units sold were priced above $3 million.

However, in our view, the BSD changes are unlikely to impact home sales significantly as the increase in BSD payment is marginal and should still be manageable for buyers of homes priced over $1.5 million and in excess $3 million. For a $2-million property, the additional BSD payable is $5,000, while for a $3-million property, it would be $15,000 – not excessive for purchasers buying at those price points. Hence, we do not anticipate the BSD changes to deter buyers, who are more focused on the long-term capital appreciation of the properties.

With the upcoming launch of freehold Terra Hill in the RCR, and continued sales momentum at existing projects, we expect new home sales will likely cross the 500-unit mark in February. The 270-unit Terra Hill project in Pasir Panjang is slated for sales launch on 25 February and it has drawn strong buying interest, attracting some 5,000 visitors to its sales gallery during the preview weekend recently.”

Kicking off this year’s new launches is 107-unit Belgravia Ace, a freehold strata landed housing project in Ang Mo Kio Avenue 5. The development features 104 semi-detached properties and three terraces. This project would be particularly attractive to buyers seeking a more spacious home and the experience of living in a landed property. Home buyers can also look forward to The Arden in Phoenix Road which is expected be launched in January/February. The 99-year leasehold development will comprise 105 dwelling units and it should appeal to diverse groups of buyers from families to young professionals as well as HDB upgraders, who want a modern home that is close to nature and nestled in a tranquil environment, given its location within a low-density landed property enclave. It is probably fair to say that the Central Region stole the spotlight in 2021, with several new projects captivating buyers and selling extremely well at launch – such as Normanton Park, One-North Eden, The Reef at King’s Dock, Midtown Modern, Irwell Hill Residences, and CanningHill Piers. In 2022, it could well be the OCR’s turn to shine even brighter as the new cooling measures rolled out in December 2021 may exert some pressure on Central Region sales.