In May, The Reserve Residences was the most popular private residential project - Novo Place EC at Tengah Plantation Close By Qingjian & Santarli (Hot Launch 2023)

Developers sold 1,038 homes that were not executive condos (ECs) during May the month of May, which was 17% over the sales of 887 in the previous month, based on the data released by URA on 15 June. This brings the total number of private homes sold to 3,181 units over during the initial five months.

The figures for May are the most private home sales for a new month in the month of May since 2022 which saw 1,355 new homes sold, says Christine Sun, senior vice director of research analytics for OrangeTee & Tie. This is also the five consecutive month of growth. With the addition of ECs sales grew to 16% between 909 and 1,055 units during May.

The sales were aided by the introduction of two major projects: The Reserve Residences and The Continuum which are both inside The Rest of Central Region (RCR). The two projects helped boost sales, developers launched a total of 1,595 units, excluding ECs available for sale in May, more than double the 798 units that were launched in the month before. This is the biggest annual launch in a month since Nov. 2021’s 1,283 units claims Chia Siw-Chuin from JLL’s chief of research in residential homes, research and consulting.

The Reserve Residences situated on Jalan Anak Bukit in District 15, sold 635 of the total 732 units that were released to the market in May. The Reserve Residences had 523 units sold for the median price of $2461 which makes it the top-selling private residential development in the in the month of May. Its Continuum is an 816-unit freehold development located situated at Thiam Siew Avenue recorded the sale of 225 units at the median price of $2,720 per square foot. Together, both projects have boosted the sales of the RCR which was recorded as 847 units during May. This is the equivalent of 82% of the total developer sales.

Within the Core Central Region (CCR) there were 152 new homes offered by developers in the month of May. This is fifteen% from developers’ total sales of new homes and the 26.9% fall m-o-m. The top-selling CCR projects comprise the Atelier that sold 22 units for an average price of $2,685 per square foot in May, and Pullman Residences Newton that sold 16 units for an average price of $3,278 per square foot.

The Outside Central Region (OCR) the number of new homes sold was 39 homes (4% of developers’ new home sales) which was bolstered by the absence of new launches and a tense inventory of unsold homes. “Based on URA statistics, of the massive market projects that have been put up to be sold in the OCR approximately 93% all homes (excluding EC) in the developments have already sold, leaving only a few choices for prospective buyers” says PropNex’s Wong. OCR unit sold during May show an 23.5% decline compared to the month prior.

A noticeable dip in purchases made by foreigners
The new private home sales that took place in May were mostly fueled by demand from the local market and local demand, which was reflected in Singaporean citizen and permanent resident (PRs) accounting for 85.5% and 11.1% of transactions, respectively. Chia Siew Chuin, the head of research and research for residential homes and consulting at JLL noting that demand from both categories of buyers is still strong despite cooling measures, increased rates for homes and rising interest rates. “Fundamental locally-based demand for private residences is strong, especially for projects that stand out with appealing characteristics and launches in areas where the demand for homes continues to outstrip the supply of private homes for sale,” she remarks.

However, the percentage of new homes owned by foreign buyers slowed. In May, foreign buyers bought 36 non-landed homes, making of 3.5% of non-landed new private home sales, as compared to the 8% that was recorded in April. PropNex’s Wong says that it’s the least amount of foreign buyers since the end of December 2021.

Lam Chern Woon, head of research and consulting at Edmund Tie, attributes the decrease to the doubled rate of additional Buyer’s Stamp Duty (ABSD) for foreigners, which has now risen to 60%. “The harsh ABSD rate for international buyers have certainly caused a lot of people to stop on their home buying journeys,” he comments.

Eugene Lim, key executive officer of ERA Realty Network concurs. “The CCR and RCR market that used to attract more interest from foreign buyers witnessed a noticeable reduction in transactions with foreign buyers. The number of units purchased by foreigners decreased from 38 units to 21 units within CCR as well as by 27 units to 13, in RCR,” he adds. In The Continuum The Continuum and The Reserve Residences The developments saw just two and three units bought by foreigners.

Lee Sze Teck, senior director of research at Huttons Asia, believes that the proportion of purchases made by foreigners will continue to decline over the months ahead. “There was a period of transition in May which allowed buyers to buy properties in the country that had been exercised before the 17th of May to fall under the earlier ABSD rates of 30%. Therefore, the full impact of the cooling measures will be apparent by June” He explains. Huttons estimate that the percentage of home purchases from foreign buyers could decrease to about 1% in the future.

The sales in June are expected to be more moderate
Looking ahead PropNex’s Wong anticipates that new residential sales of private homes to experience an increase in June, due to a lack of new launches but the number of transactions could increase next month, in light of a number of new projects being planned. “We anticipate the launch of sales for Lentor Hills Residences as well as The Myst in early July as well as Pinetree Hill, Grand Dunman along with Lake Garden Residence could potentially be on the market too,” she says. The five projects of The RCR and OCR will offer an overall total of over 2,800 homes.

Huttons’ Lee adds that Novo Place the executive condominium within Bukit Batok is scheduled to its launch in July. He expects a strong demand for the project, pointing out that it’s the first EC project to be launched in Bukit Batok in the last 22 years.

Leonard Tay, head of research at Knight Frank Singapore, expects local demand to remain the main driver of the demand for new homes in 2023, as new projects get underway. “Demand for new goods is expected to remain firm…so as long as the price is within the affordable levels for this type buyers,” he opines. The author adds that foreign homebuyers are likely to keep their eyes open at present to evaluate the effect of the new policies on the primary section of market. Knight Frank is maintaining its estimate of developers new home sales that will range from 77,000 and 8,000 units over the whole year.