New private home sales sink further in November amid holiday lull

SALES of new private homes continued to sink in November, setting a new low amid a dearth of launches and the traditional year-end holiday lull. 

Developers in Singapore sold a total of 259 units last month, excluding executive condominiums (ECs), going by data released by the Urban Redevelopment Authority on Thursday (Dec 15). This was a 17.3 per cent decrease from October’s 313 units, and 83.3 per cent lower than in November 2021. 

Including ECs, 445 units were sold in November, down from the 811 units sold in October, and a 72.4 per cent plunge from the previous year. 

Huttons Asia senior director of research Lee Sze Teck noted that the sales volume in November was even lower than the 277 units in April 2020, when the “circuit breaker” was in force. 

He chalked this up to the lack of major launches this month, as well as “extremely low unsold stock” in the market – there were only 2,166 units of launched but unsold stock this month. 

Wong Siew Ying, head of research and content at PropNex Realty, highlighted that the thinning supply of unsold stock was especially prevalent outside the central region (OCR), where most launches are 80 to 100 per cent sold. 

“Unsold stock in the RCR (rest of central region) has also been pared down, following steady sales in city-fringe projects,” she said. The imbalance in supply and demand leaves buyers with limited options, she said, and this is likely to persist in December.

Meanwhile, just 319 units were launched last month. While this was more than thrice the 102 units launched in October, it was around 75 per cent fewer than the 1,283 units launched in the year-ago period. 

There were three boutique apartment launches – the 72-unit Hill House and 38-unit Sophia Regency in District 9, and the 34-unit Kovan Jewel in the suburbs – making for a total of 144 units. The remaining 175 units were from previously launched projects. 

The reception to these three launches was, unfortunately, tepid, said Knight Frank Singapore research head Leonard Tay. Only 16 units were sold in November. 

“Without the launch of a substantially-sized project, homebuyers appeared to have turned their attention towards travel and holidays in November,” he said. “With interest rates on a high and the economy slowing, there is no present compelling incentive for homebuyers to be active.” 

More than half the take-up on new private residential units, excluding ECs, were in the core central region (CCR), where 148 units were sold. This was followed by the RCR and OCR, with 73 units and 38 units sold respectively. 

The best-selling project this month was Copen Grand, an EC in the Tengah estate which had topped the chart in October, when it was launched. Its remaining 176 units were sold in November at a median price of S$1,323 per square foot (psf). 

Analysts such as Mohan Sandrasegeran, senior analyst for research and content creation at One Global Group, attribute the popularity of such EC homes to the lack of major new launches this month and their relative affordability.

“The allure of purchasing an EC is particularly enticing for prospective homebuyers who prefer a condominium lifestyle, and do not wish to stretch their finances amid rising interest rates,” said Sandrasegeran. 

“Since an EC has a lower entry price than condos in the suburbs, it appeals to more budget-conscious buyers.”

CBRE’s head of research for South-east Asia Tricia Song said that EC buyers are usually first-time buyers and HDB upgraders, who may not be significantly affected by the 15-month waiting period from the latest round of cooling measures. 

Other best sellers in November included Riviere, a 99-year leasehold mixed development in the RCR, which sold 19 units at a median price of S$3,024 psf, and Leedon Green, a freehold CCR condo that sold 16 units with a median pricing of S$2,851 psf. 

In the year to date, an estimated 4,592 new private homes (excluding ECs) have been launched, less than half the number brought to market in the January to November period in 2021.

Looking ahead, ERA Realty head of research and consultancy Nicholas Mak said he believes the residential property market will remain muted for what is left of this year, with homebuyers away for the holidays and most major projects already launched. 

Market activity will gradually resume in January 2023, with the launches of MCC Singapore’s Sceneca Residence in Tanah Merah, he said. 

“Some of these new projects are in locations where there has been an absence of new launches for several years,” said Mak. “Hence, the sales at some of these new launches could be quite robust.” 

OrangeTee and Tie’s senior vice-president of research and analytics Christine Sun pointed out that with the recent announcement of the H1 2023 Government Land Sales programme, there could be a bumper crop of more than 4,000 new homes, including 700 EC units, in the first half of 2023. 

“The increase in supply may alleviate some of the supply-demand imbalance facing the market, and help to stabilise price growth next year,” she said. In total, more than 11,000 units may be launched across the three market segments (CCR, RCR and OCR) in 2023, easing pent-up demand, she added.