New private home sales cross 1,000-unit mark in May, buoyed by two major new launches

SINGAPORE – Robust take-up at two new city-fringe launches – The Reserve Residences in Jalan Anak Bukit and The Continuum in Thiam Siew Avenue – drove May’s new private home sales to a one-year high of 1,038 units, up 17 per cent from 887 units in April.

New private home sales excluding executive condominiums (ECs) surpassed the 1,000-unit mark for the first time since May 2022, when 1,355 new homes were transacted.

This shows that in spite of several rounds of cooling measures, higher interest rates and macroeconomic uncertainty, demand remains sound for projects with attractive attributes and in highly sought-after areas with limited new home supply.

Progressive payments for new projects have also helped buffer the impact of higher interest rates on buyers, said Ms Chia Siew Chuin, JLL head of residential research, research and consultancy.

Mr Lam Chern Woon, head of research and consulting at Edmund Tie, said May’s robust sales “gave a much-needed shot in the arm” after several rounds of cooling measures.

While developers are expected to push ahead with more launches, Mr Lam believes that buyers “are still highly price-sensitive and will refrain from over-extending themselves, given that the gross domestic product growth forecast this year has been slashed from 1.9 per cent to 1.4 per cent, while the US Federal Reserve is still unequivocal on further hikes ahead”.

Year on year, May’s sales fell 23.4 per cent, as Liv @ MB and Piccadilly Grand accounted for the high base of units sold in May 2022.

In May, a total of 1,595 units were launched for sale, nearly double the 798 units launched in the previous month, and 28.6 per cent higher than that a year ago, according to data released by the Urban Redevelopment Authority on Wednesday.

With ECs included, May’s sales rose 16 per cent to 1,055 units, from 909 in April, but fell 23 per cent from 1,375 a year ago. There were no ECs launched in May.

Analysts say sales may taper off in June due to a lack of project launches that month.

But Lentor Hills Residences is among several upcoming launches that are expected to hit the market in July, and some developers could launch their projects ahead of the start of the Hungry Ghost festival on Aug 30.

The city fringe held its ground as the best performer among the submarkets in May, with integrated development The Reserve Residences shifting 523 units at a median price of $2,461 per square foot (psf), and freehold condo The Continuum selling 225 units at a median price of $2,720 psf.

These two projects collectively accounted for 72.1 per cent of total private home sales and 88.3 per cent in the city fringe alone.

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said The Reserve Residences saw strong demand due to its proximity to top schools in the Bukit Timah area, convenience and high rentability.

The prime district, which tends to attract foreign buyers, saw slower sales in May due partly to a lack of new launches. Transactions dropped 26.9 per cent to 152 in May from April, with the proportion of new non-landed private home sales to foreigners falling to 3.5 per cent of the monthly sales in May, compared with 8.2 per cent in April, analysts said.

Mr Lam noted that the punitive 60 per cent additional buyer’s stamp duty (ABSD) rate for foreigners has significantly cooled interest, while Singaporeans and PRs buying their first homes have remained insulated from the latest cooling measures.

“On average, about 50,000 citizenships and permanent residencies are granted annually. The lower-tier ABSD rates for the new residents will sustain further purchases,” he said.

JLL’s Ms Chia noted that the proportion of new private home units bought by Singaporean buyers jumped from 82.2 per cent of all new private homes sold in April to 85.5 per cent in May. Permanent residents also snapped up 11 per cent of all new units in May, compared with 9.6 per cent in April.

Meanwhile, the suburbs saw a 23.5 per cent drop in May to just 39 transactions due to a lack of new launches and tight unsold supply.

But Ms Wong Siew Ying, PropNex’s head of research and content, believes sales volumes should rebound in July with the launch of Lentor Hills Residences and The Myst in Upper Bukit Timah Road in early July.

Pinetree Hill at Pine Grove, Grand Dunman in Katong and LakeGarden Residences in Yuan Ching Road could be launched as well. “Collectively, these five projects in the city fringe and suburbs can offer more than 2,800 residential units, especially in the suburbs, where unsold supply has been low,” she said.

A further boost could come from the recent lowering of mortgage rates for fixed-rate housing loans, which could boost interest in projects that will be completed over the next two years, as buyers can opt to switch to fixed-rate loans upon the property obtaining its temporary occupation permit, Huttons Asia’s senior director of research Lee Sze Teck said.

“Fixed-rate mortgage interest rates with a three-year lock-in can be as low as 3.4 per cent, down from the peak of more than 4 per cent last year,” Mr Lee said.

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