SINGAPORE PROPERTY MARKET: NEW PRIVATE HOME SALES (DEC 2021)
Month-on-month, the number of new homes launched took a 70% plunge while sales of new homes dropped 58%; Prices of new homes appear to be stabilising; Impact of the latest cooling measures is likely to be more defined in the following months.
December saw a strong take-up rate of new homes despite a sharp decline in the number of new homes launched. A total of 383 new homes were launched in December, a 70.1% plunge from the 1,283 units put in the market in November. The outside central region (OCR) posted 224 new sales last month even with no new units launched, while the take-up rate - measuring new sales against launches - reached 123% in the core central region (CCR) and 107% in the rest of central region (RCR).
Units from previously launched projects continued to be soaked up by homebuyers, while developers are taking a cautious approach to launches in view of the newly introduced cooling measures. 650 private homes were sold last month, a 58% drop from November’s record. These transactions were primarily driven by sales in the city fringe area. In particular, integrated developments such as Canninghill Piers were coveted and commanded price premiums. Meanwhile, the OCR or suburbs posted the month’s second-highest volume as developers moved 224 private homes, although there were no new launches. In the CCR, new sales totalled 134 units and launches amounted to 109 units in December.
A total of 69 new Executive Condominium (EC) units were sold last month. New home sales, including ECs, totalled 719 units, which was down 55.3% from November and 43.2% lower than the previous year. No new EC units were launched in December 2021.
New private home sales amounted to 13,372 units for the whole of last year, marking the highest annual volume since 2013, when 14,948 units were transacted.
Year-on-year, developers moved 46.6% fewer homes last month, compared with 1,217 units in the previous year. They also launched 71.6% fewer units than the 1,349 in December 2020. Analysts attribute the drop in new homes launched and sold to the year-end lull and the latest round of cooling measures introduced by the government on 16 December.
The median psf prices of new private homes in the CCR rose 1.9% month-on-month to S$3,033 in December, from S$2,976. In the OCR, median psf prices inched up by a modest 0.3% to S$1,679, from S$1,674 in November. The RCR posted a decline of 1.8% to S$2,182, from S$2,221 in the previous month. Analysts expect prices to stabilise and grow at a slower pace this year, in view of the new property curbs.
Although some foreigners could now be deterred by the increase in additional buyer’s stamp duty (ABSD), which has been increased to 30%, others might still be interested in purchasing luxury homes in the CCR, as prices there did not increase as much as the other regions.
While the latest cooling measures will dampen sales momentum, the impact is expected to be temporary and the overall market remains well supported by a robust labour market, ongoing economic growth, and healthy demand-supply dynamics in the property market.
Analysts project overall private residential prices to increase about 1% to 3% this year, considering the new cooling measures and probable interest rate hikes. New sales of private homes could reach 8,000 to 10,000 units in 2022, amid fewer launches in the pipeline.
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