Private residential sales in January 2023 show a rise in the same month that developer sale (excluding executive condominiums (ECs) rose by 130% in m-o-m, to 391 units, up from 170 units sold in the month of December 2022, as per PropNex Realty.
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The majority of the new units sold this month can be due to the debut of 268 units in the Sceneca residence in Tanah Merah Kechil Link, which was the very first project launched this year. The project has sold an average of 157 units, at a price of $2,083 per sq ft and accounted for 40.2% of January’s new numbers for home sales.
In the end that sales within that region, the Outside Central Region (OCR) which is where Sceneca Residence is located, represented 47.3% of the total amount of developer sales this month. In the Core Central Region (CCR) contributed 40.4% and the Rest of Central Region finished with 12.3%.
“The positive sales figures show an increase in requirement for homes, particularly in the suburbs , where the supply is still tight. This is in spite of the steep rates of interest and the cooling measures introduced in September 2022.” is Christine Sun, senior vice head of research and analytics of OrangeTee & Tie.
“The strong sales debut in the Sceneca Residence on January 1 may be the catalyst for more major launches in the future and is a good sign for the growth of private home sales in the coming season,” claims Wong Siew Ying the head of content and research of PropNex Realty.
She also says that those who purchase new houses from developers through the scheme of progressive payments will be less irritated by higher interest rates. This is due to the fact that the mortgage payments will rise slowly, in line with development milestones.
In the words of Lee Sze Teck, senior director of research at Huttons Asia, the relaxation of travel to international destinations by China in the last month brought about the return of wealthy buyers or investors in the Singapore property market.
“The super-rich Chinese are behind a few of the deals made at Klimt Cairnhill in January, leading the project to become the top three most-popular project of the month. Seventeen of the 17 units in Klimt Cairnhill were sold to foreigners (in January 2023),” says Lee.
The project, which has 138 apartments Klimt Cairnhill is a luxurious project located on Cairnhill Road, was the third most-sold project based on the volume of transactions last month. Its developer, Low Keng Huat relocated 17 units at a an average price of $3,784 per square foot.
It was claimed by Sceneca Residence, followed by the 638-unit Leedon Green, where 21 units were sold for a median of $2,957 per square foot.
Lee states the Klimt Cairnhill was the target for the majority of mainland Chinese buyers because of it’s “availability of large homes that exceeded two thousand square feet. The 15 units that were sold by Klimt Cairnhill were above 2,000 sq feet”.
He says that the coming year may see the return of some of the most prominent deals from Chinese buyers from mainland Chinese buyers, who are bolstered by their desire for huge-sized luxury homes.
The government announced an amendment to the stamp duty on buyers (BSD) in the context of Budget 2023, introducing a more progressive tax structure. This is likely to “add to the current state of uncertainty in the residential market for private homes. It doesn’t mean there aren’t any buyers” according to Leonard Tay, head of research at Knight Frank Singapore.
According to him, the knee-jerk response will make most buyers pause and think about the additional cost of buying an individual home during an uncertain time. “However when there are additional announcements (later in the year) to spark the enthusiasm of prospective buyers, transactions will increase. Homebuyers in Singapore have grown accustomed to the frequent announcement of various government policies and tax adjustments,” says Tay.
In March, the 300-unit Terra Hill in Pasir Panjang is expected to go on sale. It will be followed by two other projects that will be launched in March -The Botany at Dairy Farm and Blossoms By The Park. the Botany located at Dairy Farm and Blossoms By The Park. Other projects that are on the horizon are Tembusu Grand and The Continuum.
Tricia Song, director of research Southeast Asia, CBRE, is also expecting a slowdown in the sales of new homes. “Demand is uncertain for the near-term due to the combination of a slowing economy as well as high mortgage rates and tightened lending conditions since September 2022’s round cooling measures. Furthermore, the increase in BSD that Singapore announced in its Budget 2023 could weaken the appetite for home purchases particularly for higher-end properties,” she says.
She expects developers and buyers to “reassess and recalibrate their buying strategies” by adopting a wait-and-see-approach over the next few months.