New Private Home Sales for New Launch Projects on Strong Take-up - Doubled in May to hit highest in Six Months

Private new home sales surged in May 2022 on robust sales, with Piccadilly Grand and Liv @ MB being the two New Launch projects which contribute about 41% of total sales for the month. In total, developers sold 1,356 new single-family homes (excluding Executive Apartments) in May, up 105.5% from the 660 modified units traded in the previous month. This is also the highest monthly new home sales since 1,547 units were sold in November 2021. Compared to May 2021, developer sales increased by 51.5% last month.

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New Launch Projects located in the Rest of the Center (RCR) area or the edge of the city dominated sales in May, selling 893 new homes – a massive 207% increase from April. The RCR sub-market accounted for about 66% of total sales for the month, mainly due to Piccadilly Grand selling 318 units at an average price of $2,175 per ton as well as Liv@MB, where 236 units changed hands at an average price. average is $2,405 psf.

New Launch Projects sales also increased in the Out-of-Central Region (OCR) in May with 247 units traded, up nearly 53% from 162 units sold in the previous month. The lack of new projects in this sub-market has helped boost sales at existing projects. The top-selling private housing projects in OCR in May were The Florence Residences (launched in March 2019) which sold 40 units at an average price of $1,786 per square meter and The Gazania (launched in October) May 2019) sold 33 units at an average price of $2,241 psf.

New Launch Projects: New Private Home Sales for Doubled in May to hit highest in Six Months

What's special about New Launch Projects with New Private Home Sales in May?

“Sales came roaring back in May after a relatively slower performance in the earlier part of the year. The rebound in new home sales last month was not unexpected as two RCR launches Piccadilly Grand and Liv @ MB were popular with buyers – contributing to about 41% of May’s transactions. The strong take-up in the two new projects at median prices of $2,175 psf and $2,405 psf for Piccadilly Grand and Liv @ MB respectively is very encouraging, suggesting that demand and liquidity are still intact amid global economic headwinds. The supply crunch and absence of new launches in the OCR mass market could also have channeled some buyers into the RCR segment, boosting sales in the two projects.

As more New Launch Projects become available, we can anticipate more buyers entering the market, including those who may have been on the sidelines, after the introduction of new cooling measures in December 2021. In addition, buyers can also look at the average sales of new homes in recent months and judge that prices have not fallen substantially. With stable land prices, some buyers may also think that future sales prices are likely to continue to rise. Furthermore, some buyers may decide to buy sooner rather than later to lock in more favorable interest rates, in case interest rates rise further.

Singaporeans continued to account for the majority of private new home sales in May, accounting for 83.3% of the month's sales. An analysis of the forecast data by region (see Figure 1) shows that Singaporean adoption of new apartments in the CCR and RCR increased from April to May, indicating that local buyers are receiving value in city center projects and city periphery projects. . Singaporeans accounted for 73.5% of CCR new home sales in May (up from 66.1% in April) and 84.6% of RCR sales (up from 80.9% in April). Meanwhile, 56.3% of developers' total revenue in May traded at less than $2 million, compared with 45.4% in April (see Figure 2). On a price quantization basis, $1.5 million to under $2 million continues to be the pricing point for new private homes.

“We expect new home sales to continue to gain traction, with transactions likely to surge in months where there are new projects being put on the market. Some of the upcoming launches over the next few months include The Arden in Phoenix Road, AMO Residence in Ang Mo Kio Avenue 1, Lentor Modern in Lentor Central, and Sceneca Residence in Tanah Merah Kechil Link. However, we remain watchful of potential downside risks for property sales amid rising inflation, further interest rate hikes, and the pessimism over global growth.”

Source from Propnex - 28 June 2022

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