THE number of new private homes sold in September more than doubled over the tally in August, on the back of two major launches that set new price benchmarks for suburban housing. 

According to data released by the Urban Redevelopment Authority (URA) on Monday (Oct 17), developers in Singapore sold a total of 987 units, excluding executive condominiums (ECs). This is a 125.3 per cent increase from August’s 438 units, and 18.3 per cent higher year on year.  

Including ECs, 992 units were sold in September, compared with 449 units sold in August and down 23.5 per cent from the previous year. 

Meanwhile, 913 units in total were launched last month, almost seven times the 134 units launched in August, and 29.3 per cent higher than the number launched in September 2021. Excluding ECs, September’s 913-unit tally was also significantly higher than the 210 units launched in the year-ago period.

More than two thirds of the take-up of new private residential units, excluding ECs, were in the suburbs or outside central region (OCR) with 686 units sold. This was followed by the core central region and the city fringe, or the rest of the central region, with 198 units and 103 units sold respectively. 

Best-selling projects during the month included Lentor Modern and Sky Eden@Bedok, both of which are in the suburbs. GuocoLand’s Lentor Modern, being built in the Yio Chu Kang area, put 605 units on the market mid-month and sold 512 units. Frasers Property launched its 158-unit Sky Eden@Bedok early in September and sold 121 units. Both projects were launched with median pricing of above S$2,100 per square foot (psf).

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According to real estate consultancy JLL, the units launched by both Lentor Modern and Sky Eden@Bedok accounted for 83.6 per cent of all units launched in September. 

JLL senior director of research and consultancy Ong Teck Hui said: “This shows that new private home sales are highly dependent on new launches for fresh supply, as previously launched projects, especially the popular ones, are selling down and leaving less options for buyers.” 

“Prices of new launches are therefore likely to remain firm, given the shortage of supply.” 

With the launch of Lentor Modern and Sky Eden@Bedok, OrangeTee & Tie noted that the proportion of new non-landed homes sold above S$2,000 psf surged to 84.3 per cent in September, from 45.7 per cent in August. 

The number of new non-landed homes sold above S$2,000 psf in the OCR also skyrocketed to 550 units this month, from a monthly average of 35 units from January to June. 

September’s sales performance is “astounding”, said Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie, considering the recent interest rate hikes and growing economic uncertainties. 

“Demand remains strong due to a lack of home supply in the suburbs and HDB upgraders who sold their flats in recent months and still need a replacement home,” said Sun. 

CEO of ERA Realty Network Marcus Chu added that strong demand in the market, despite new benchmark prices, could also be due to rising inflation rates. 

“Despite the economic uncertainty and rising interest rates, some homebuyers are still bullish on the property market as they acquire real estate, both as a hedge against inflation and as a means to grow their retirement portfolio,” he said.

While the strong sales showed firm demand for suburban housing even at prices above S$2,000 psf, Leonard Tay, head of research at Knight Frank Singapore, noted that the projects that came in third to sixth in the month’s top 10 bestselling list were all in the prime area or Core Central Region (CCR). These prime properties comprised Leedon Green (31 units sold), Pullman Residences Newton (27 units sold), Perfect Ten (23 units sold) and Hyll on Holland (21 units sold) for a total of 102 units.

“Even though the 198 new sales in the CCR in September is 10 per cent less than in August, there has been some steady traction of transactional activity of prime homes since borders reopened from April 2022, bearing in mind that the median psf prices of units in the CCR are higher than those in the OCR and characteristically have a more limited pool of buyers with the financial purchasing power to acquire such homes,” Tay added.

Two more major launches are coming up in the rest of the year and both are EC projects: City Developments Ltd’s Copen Grand in Tengah and Qingjian Realty’s Tenet in Tampines.

While the government’s latest cooling measures are expected to induce some tapering off in demand for housing, OrangeTee & Tie’s Sun believes that demand for ECs will remain robust due to its limited supply. She noted also that most EC projects have been fully sold except for North Gaia, which was launched this year. 

“As prices of new suburban condominiums continue to rise, we may expect more eligible buyers to turn to the EC market as these homes are still more affordable and value for money,” said Sun. 

Looking ahead, real estate analysts see the pace of both new home sales and launches slowing.

“With most major new launches already concluded in the year, (as well as) the December holiday seasonal lull and fresh residential property curbs, both homebuyers and developers are likely to adopt a wait-and-see approach in Q4 2022 to digest and ascertain the impact of the new measures,” explained Tricia Song, CBRE head of research in Southeast Asia.

Likewise, Edmund Tie believes the primary market sales in 2022 will moderate to about 9,000 units, down from 13,000 units in 2021. 

This comes in view of tighter financing conditions, ongoing macroeconomic headwinds and rising interest rates, said Lam Chern Woon, Edmund Tie’s head of research and consulting. 

An estimated 6,483 new private residential units have been sold year-to-date, some 35 per cent lower than the 10,009 units sold in the same period in 2021. 

Year to date, an estimated 4,024 new private homes have been launched, half the number brought to market in the January to September period in 2021. 

“With a slowdown in the sales momentum, the demand-supply dynamics are now more balanced and the unsold inventory would take about 2.5 years of primary sales to be cleared,” said Lam.

He therefore expects private residential price growth to soften to 9 per cent for the whole of 2022, compared with 10.6 per cent in 2021. 

“Private growth expectations for 2023 remain positive although risks are growing amid the multiple economic headwinds,” he said.