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Private home sales fell in June and developers selling just 278 brand new homes, excluding executive condominiums (ECs). This is an 73.2% fall from the 1,039 units sold in May and 43% less that the 4,88 homes that were sold in June of last year.
The first decrease in sales per month this year, and the lowest so far for 2023. It’s also the lowest number of sales since December 2022, when 171 homes sold to developers According to Tricia Song, director of research for Southeast Asia, at CBRE.
The decrease comes on the heels of a lack of projects launched in the month of July and also the summer school holiday. Developers particularly those who planned for larger-scale projects that would have greater than 500 units chose to schedule their launches for July to avoid the summer vacation time, says Leonard Tay, head of research at Knight Frank Singapore.
In the end, just 31 new homes without ECs were introduced in June. The number represents 98.1% lower than the 1,595 units announced in May, and 92.2% lower y-o-y. “The 31 units that were launched in June 2023 are the record-breaking low amount of units launched since the monthly series of data was released in 2007” Tay says. Tay. The launch of new homes in June came mostly through Lavender Residence Lavender Residence the boutique development that has 17 units on Lavender Street, which is located in District 8.
The figures for June show new home sales for 1H2023 at 3,463 units, an increase of 18% per year compared to 4,222 units sold in the same timeframe in 2022. As for launches, it is estimated that 3,736 private homes are available for sale in the first quarter of the year, which is more than the 2,569 units sold in 1H2022, claims Chia Siew Chuin, the head of research and research in residential homes and consulting at JLL.
Rest of Central Region ranks high
For the third consecutive month that new home sales increased, they were lead by Rest of Central Region (RCR). The region had 147 homes sold in June, a decrease of 82.6% m-o-m. The month of May saw developers have sold 847 houses, mostly driven by the announcements of The Reserve Residences on Jalan Anak Bukit as well as the Continuum located at Thiam Siew Avenue.
The Reserve Residences maintained its position as the top-selling residential development in June, selling the sale of 79 units at a median cost of $2,646 per sq ft. The RCR, Lavender Residence was the second-highest-selling property, with eight units being sold at an average price of $1,972 per square foot.
The Core Central Region (CCR), developers sold 112 new houses, representing a drop in the region of 26.8% m-o-m. Top-selling projects include Leedon Green which sold 14 units for the median price of $2,812 psf. then Van Holland which sold 13 units. were sold for an average price of $2,692 per sq ft.
CBRE’s Song says that the CCR’s sales are influenced by construction projects that were nearing completion when developers provided discounts and promotions. The Atelier located along Makeaway Avenue in Newton, sold 12 units in June for a median cost of $2,663 psf. It currently is at 95% sold. “Prices (at The Atelier] are about 8% to 9% less than the median of $2,916 per square foot when it was first announced and it sold four units by March 2021.” Song adds.
The Van Holland, a 69-unit development Van Holland, located on Holland Road and is currently completely sold, having moved its 13 units in the last month at an average cost of $2,692 psf. The development is expected to get its temporary occupancy permit in the month of March.
Within the Outside Central Region (OCR) in the Outside Central Region (OCR), inventory that was not sold slowed sales and the region saw only 19 units sold, which is 51.3% lower m-o-m and the third consecutive month of decrease. The most popular OCR product in the month of June was Lentor Modern with five units sold for the median price of $2125 per square foot.
The EC sector, developers sold 19 new units in June, slightly over the 17 units that were sold in May. North Gaia EC located in Yishun had the highest sales, by selling 14 units at the median price of $1,280 per square foot.
Foreigners make purchases
Private home purchases made by foreign buyers continued to decline in June, signalling the effect of the cooling measures that took effect in April 27 claims Lee Sze Teck, senior director of research at Huttons Asia. Based on URA conditions that thirteen new houses were bought by foreign buyers in June (representing 4.7% of total residential sales) as compared to the thirty transactions that were made in the month of May. In the CCR the CCR, only seven units are sold out to foreign purchasers in the last month and this is the lowest number since February 2021, in which six homes sold foreign buyers, Lee says.
Eugene Lim, key executive office manager at ERA Realty Network, adds that foreigners could be looking to become permanent residents prior to buying a home. In July, the permanent resident made up of 10.8% of new private homes sold, an increase over 9.6% in April.
A rebound in sales is expected in July
Despite the dip in June, sales are predicted to experience a significant increase in July owing to several major launches, including for example, the 408-unit It’s the Myst located on Upper Bukit Timah Road; the 598-unit Lentor Hills Residences located on Lentor Hills Road as well as 1 008 units of Grand Dunman on Dunman Road; and the 528-unit Pinetree Hill in the Pandan Valley-Pinegrove neighborhood.
“The four projects have sold more than 1,100 units in their respective launch dates on the July 8 and 15 weekend,” claims Wong Siew Ying director of content and research of PropNex Realty. She anticipates RCR transactions to lead developers sales in July, fueled by the sales at Grand Dunman and Pinetree Hill as well as The Myst and Lentor Hill Residences will provide an boost in the OCR.
Knight Frank’s Tay says that the results of recent projects indicates that homebuyer interest is “very active” especially for homes that are located in suburbs. “Demand for such homes in the remainder of 2023 will be supported by homebuyers who are buying homes for their own purposes and household balance sheets are solid,” he says.
CBRE’s Song is in agreement, noting that home sales for new homes could be able to catch up in the second part of the year when more projects are announced. She estimates that between 7,500 to 6,500 new homes for private buyers could be sold by 2023, which is on par with the 7,099 homes that were sold last year. The upcoming launches scheduled for the next weeks include Lake Garden Residences along Yuan Ching Road, Altura EC in Bukit Batok, TMW Maxwell along Maxwell Road, Orchard Sophia on Sophia Road, and The Arden on Phoenix Road.