Based on the data released by the Urban Redevelopment Authority on 15 June, developers’ sales in May more than doubled month-on-month (MoM). 1,356 new private homes (excluding Executive Condos or ECs) were sold compared to April’s 660 units, reaching a six-month high. On a year-on-year (YoY) basis, developer sales increased by 51.5% from the 895 units transacted in May 2021. This brings the total developer sales (excluding ECs) year-to-date (YTD) to 3,841 units, down by 32.1% compared to the same period last year and at just 29.5% of 2021’s 13,027 units sold.
Top 10 Selling Projects in May 2022 (including EC)
|
Project Name |
Locality |
Number of Units Sold |
Median Price ($psf) |
% Sold-to-Date |
|
|
1 |
PICCADILLY GRAND |
RCR |
318 |
$2,175 |
78% |
|
2 |
LIV @ MB |
RCR |
236 |
$2,405 |
79% |
|
3 |
NORMANTON PARK |
RCR |
40 |
$1,889 |
98% |
|
4 |
THE FLORENCE RESIDENCES |
OCR |
40 |
$1,786 |
98% |
|
5 |
AVENUE SOUTH RESIDENCE |
RCR |
36 |
$2,384 |
96% |
|
6 |
THE GAZANIA |
OCR |
33 |
$2,241 |
46% |
|
7 |
CANNINGHILL PIERS |
RCR |
29 |
$2,814 |
91.8% |
|
8 |
KI RESIDENCES AT BROOKVALE |
OCR |
26 |
$2,034 |
92% |
|
9 |
MEYER MANSION |
RCR |
26 |
$2,689 |
80% |
|
10 |
VERTICUS |
RCR |
24 |
$2,231 |
94% |
|
|
|
|
|
|
|
Source: Colliers, URA. CCR: Core Central Region; RCR: Rest of Central Region; OCR: Outside Central Region.
The dust from the cooling measures seems to have settled, with developers’ sales coming in at an impressive 1,356 units sold. This strong performance can be attributed to the launch of attractive and well-located projects, such as Piccadilly Grand (318 units sold) and Liv@MB (236 units sold).
With take-up continuously exceeding units launched since January 2021, this also implies that developers’ inventory is depleting with unsold stock declining further. There is a huge gap between the top two selling projects (Piccadilly Grand and Liv@MB) and third best-selling project (Normanton park with 40 units sold), reflecting the pent-up demand for well-located projects.
In addition, the number of new sales to foreigners and PRs has increased by around 70% from 133 units in April to 226 units in May, after the reopening of borders, with the majority of sales coming from CCR (25.2%) and RCR (60.6%). This is testament to the attractiveness of Singapore’s residential market to foreigners, despite the heavier stamp duties. This trend also bodes well for higher end properties in the CCR and RCR.
Outlook
The strong new home sales may be attributed to a few factors: 1) buyers are motivated to lock in mortgage rates ahead of further rate hikes, 2) pent-up demand for well-located projects, and 3) demand supported by strong HDB and private resale prices.
In the next few months, there could be some rotation of demand from the RCR to OCR, given the sharp price increase in RCR (+21.1% since its last trough in Q2 2020). The upcoming launch of Sceneca Residence, Lentor Modern, and AMO Residence will also divert demand to the OCR.
Colliers expects the residential market to remain resilient and prices to hold firm, on the back of positive sentiments, more attractive launches coming onto the market and strong underlying fundamentals. Residential employment has recovered to pre-pandemic levels of 3.0% as of March 2022, while the median monthly household income has recovered 3.6% from the pandemic lows to reach a historical high, as of end 2021.
Nevertheless, the spectre of macroeconomic uncertainties and rising interest rates might deter some prospective buyers; the steep hike in borrowing rates may also price some upgraders out of the market in terms of their mortgage eligibility. As such, new home sales is likely to moderate 30-40% from the 13,027 units recorded in 2021 to around 8,000 units. Further, momentum in private home prices is expected to moderate and rise by just 3-4% in 2022, tracking the projected growth in GDP.
