New launches drive new private home sales to highest level since July in November

November saw a spike in new private home sales, as 784 units were snapped up by buyers, mainly from three new launches – J’Den, Hillock Green and Watten House. This was a huge jump of 286.2 per cent from the 203 units sold in October and 201.5 per cent from the same month last year, based on the data released by the Urban Redevelopment Authority (URA) on Friday (Dec 15).

The strong demand came after a lull in new launches in September and October. In November, developers launched 970 units, the most since July and more than the 319 units launched a year ago.

J’Den, a CapitaLand project in Jurong East, sold 89 per cent of its 368 units at its launch. Knight Frank’s head of research, Leonard Tay, said: “J’Den attracted flash demand as it was the first new launch in Jurong East in 10 years since 2013. The area has well-developed amenities like malls and healthcare facilities, as well as the potential of Jurong Lake District and the government’s plan to create a decentralised commercial hub outside the CBD.”

As per the caveats lodged, J’Den sold 329 units in November at a median price of S$2,475 per square foot (psf); Hillock Green sold 132 units at a median S$2,110 psf and Watten House sold 109 units at a median S$3,199 psf. These three projects accounted for 570 units, or more than 70 per cent of the total sales, in November.

JLL’s head of residential research, Chia Siew Chuin, said: “The sales performance of these new projects shows that the market has high liquidity and strong demand from different types of homebuyers.

“Despite the market challenges and cautious mood, the combination of high liquidity and buyers’ aspirations continues to drive sales that support price levels whenever a new project with attractive and compelling features is launched.”

Watten House “was a surprise hit, given its high quantum of at least S$3 million per unit”, said CBRE’s head of research for Singapore and South-east Asia, Tricia Song.

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PropNex Realty’s head of research and content, Wong Siew Ying, noted that the median price of new non-landed homes sold in the suburban outside central region (OCR) rose 12.7 per cent from October to S$2,340 psf in November, as sales at J’den boosted prices. “This is the first time that the monthly median price of new non-landed homes sold in the OCR has exceeded the S$2,300-psf mark,” she said, and this would push up the overall OCR prices in the fourth quarter.

On a monthly basis, median prices in the rest of central region (RCR) increased by 5.4 per cent to S$2,551 psf in November, while the median price in the prime core central region (CCR) fell by 1.4 per cent to S$3,195 psf.

OrangeTee & Tie’s senior vice-president for research and analytics, Christine Sun, highlighted a significant rise in prime sales in November. Some 150 new non-landed homes were sold in the CCR, the most sales in the CCR since April 2023 when the government raised the Additional Buyer’s Stamp Duty (ABSD) rates and doubled the rate for foreigners from 30 per cent to 60 per cent.

November also recorded 60 non-landed homes sold for at least S$5 million, with three transactions above S$10 million at Watten House. This was the highest monthly sales of properties costing at least S$5 million since May 2010, when 63 such units were sold, Sun said. There were no transactions above S$10 million in the previous four months.

The most expensive condo deal in November was at Watten House, where a 4,080 sq ft unit was sold for S$14.5 million or S$3,545 psf, said Thomas Tan, Singapore Realtors Inc’s (SRI) chief executive officer.

Huttons Asia’s senior director for data analytics, Lee Sze Teck, also mentioned that a detached house in Mount Rosie was sold to a Singaporean for S$33.9 million in November. More than half of the new homes sold in November were priced at S$2 million and above. In the executive condominium (EC) segment, developers sold 16 new units in November, down from 21 in the previous month.

Foreign buying was still low. In total, 14 foreigners bought new residential properties in November, up from 13 in the previous month, according to URA data. Out of the 14 sales, nine deals were in the CCR, four in the OCR and one in the RCR.

After the strong sales in November, “with no new launches in December due to the year-end holidays, 2023 is likely to end with the lowest new-home sales since 2008”, said CBRE’s Song.

The total new-home sales excluding ECs from January to November 2023 reached 6,316 units, some 9.6 per cent lower than the same period last year, said JLL’s Chia.

“This is in spite of a higher launch total of 7,515 units from January to November 2023, compared with 4,483 units in the same period in 2022 and reflects both the market worries and buyers’ cautious attitude,” she added.

For the whole of 2023, the sales volume will not exceed the 7,099 new units (excluding ECs) sold in 2022, said PropNex’s Wong.

PropNex expects at least five launches in January – The Arcady @ Boon Keng and The Hillshore in the RCR, Hillhaven and Lentoria in the OCR, and Lumina Grand EC. These projects will offer more than 830 private homes and 512 new ECs.

CBRE’s Song expects that private residential prices will rise 3 to 4 per cent in 2024, similar to 2023. New launch demand and sentiment have weakened significantly, she noted, and she expects the weakness to continue into the first half of 2024, as global economic growth slows down.

“However, things could improve in the second half of 2024 as global demand for Singapore’s exports recovers and interest rates stop their rise globally,” she added.

She forecasts 7,000 to 8,000 new launches being sold in 2024, up from this year but still below the five-year average of new developer sales of 9,763 units, between 2018 and 2022.

Adapt from THE BUSINESS TIMES

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