Singapore new private home sales in June drop to lowest since May 2020

THE market for new private home sales cooled in June, falling to 488 units from May's 6-month high of 1,355 units, excluding executive condominiums (ECs).

The figures released by the Urban Redevelopment Authority (URA) on Friday (Jul 15) showed that transactions recorded last month were the lowest since May 2020, where 487 units were transacted. Between December 2021, when cooling measures were introduced, and April this year, monthly figures hovered around 600 units.

June 2022 sales also represent a 44 per cent fall from the same period last year, where 872 transactions were carried out. 

Despite the quiet month, analysts believe that the demand for new houses remains healthy and should increase in coming months. Developers did not launch any new projects in June.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, noted that last month's sales were also the lowest June sales since 2015, when 375 transactions were inked. However, she said that demand for new homes "can still be considered healthy". 

Good sales performances of recent project launches indicate that "there are buyers who are keen to enter the market despite the cooling measures and macroeconomic uncertainties".

"Healthy sales take-up" is expected for a few new product launches in areas that lack supply of private homes, which may boost total sales in coming months, she added.

Huttons Asia's senior director of research Lee Sze Teck agreed, adding that sales in July are likely to increase to around 700 to 800 units on the back of a major launch - AMO Residence, the first major non-landed project launch in Ang Mo Kio in 8 years.

The development saw "overwhelming interest" in the first week of preview on its attractive preview price, he said.

Most of the transactions, excluding ECs, were for homes in the core central region (CCR) at 206 units, followed by the rest of central region (RCR) and outside central region (OCR) at 171 and 111 units respectively.

Leonard Tay, head of research at Knight Frank Singapore, noted that this was the first time since March 2021 that the CCR had the greatest number of units sold. It also marked the third straight month where sales in the CCR were above the 200-unit mark.

Huttons' Lee said that the high sales of CCR projects was "due to ample liquidity and good value".

Tay added that "lower than normal" sales in the other regions were "not only due to the school holidays, but also to the dwindling stock of unsold units in mega projects located in these regions".

URA Realis data showed that 14 new non-landed homes were sold above S$5 million last month. OrangeTee's Sun said that one condo, a 3,972 square foot property at CanningHill Piers, was sold above S$10 million at S$17.55 million or S$4,419 per square foot.

She added that no private homes or even ECs were sold below S$1 million last month.

Lee said: "Buyers were apparently unfazed by the increase in interest rates as they went for pricier homes. This is because loan drawdowns for new homes are on a progressive basis or they could have used more cash for the purchase."

Including ECs, sales dropped 63.9 per cent from 1,375 units to 496 units on the month.

In total, 397 units were launched in June 2022, with 349 in the CCR, 48 in the OCR and 0 in the RCR.

OrangeTee maintained its full-year sales projection of between 9,000 and 10,000 units for 2022; Knight Frank's Tay said that new private home sales are "on track to reach around 8,000 to 9,000 units for the whole of 2022", as anticipated at the beginning of the year.

Tay cautioned that rising interest rates could see buying activity taper in coming months.

However, he added: "Looking at the remaining 6 months of the year, the sheer weight of demand is outpacing the backlog of supply as Singapore normalises from the pandemic years."

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