New home sales hit 6-month high in May 2022

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Five months after the latest round of cooling measures was announced in Dec 2021, sales of new homes rebounded and hit a six-month high in May 2022.

According to the URA developers’ monthly sales data, 1,356 new homes, excluding ECs, were sold last month.

Christine Sun, Senior Vice President of Research and Analytics at OrangeTee and Tie, noted that this translates to a 105.5 per cent increase compared to the 660 units sold in April 2022.

Tricia Song, Head of Research at CBRE, attributed the robust sales to the pent-up demand after the onset of property curbs.

Sun added that sentiments typically recover around two to six months after each round of cooling measures.

“For instance, new home sales excluding EC jumped by 139.2 per cent month-on-month in Nov 2018, four months after cooling measures were implemented in July 2018. Similarly, sales rebounded by 63.6 per cent month-on-month in Sept 2013, two months after new rules on TDSR were imposed in July 2013.”

Another reason for the sales rebound is the limited number of new homes in the coming months.

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Last month also saw the launch of two big projects: Piccadilly Grand and Liv @ MB. Both have made headlines for their high take-up rate within the first sales weekend.

By the end of May, these projects have clocked a take-up rate of 78.1 per cent and 79.2 per cent, respectively.

“As the first major private residential launch to come on the market since Dec 2021’s cooling measures, the positive showing at Piccadilly Grand is indicative of stable underlying demand for well-located and sensitively-priced homes in the residential market, which bodes well for other upcoming launches in 2022,” Song commented.

Other projects launched last month were Atlassia and Baywind Residences.

Song also noted that the largest proportion of new homes sold last month were priced $1.5 million to $2 million, making up 30.5 per cent of the transaction volume. This was followed by those priced $1 million to $1.5 million (25.8 per cent) and $2 million to $2.5 million (19.2 per cent).

More expensive homes sold in the OCR

Another trend Sun observed is that more new homes in the OCR have been sold at higher prices.

“A monthly record of 22 new condominiums (excluding EC) in OCR was sold above $2,200 psf last month.” Out of these, 10 units have crossed the $2,400 psf mark. They all came from The Gazania and The Lilium.

Increase in foreigners buying new homes

More foreigners have returned to the market, despite the 10 per cent increase in the Additional Buyer’s Stamp Duty (ABSD) from 20 per cent to 30 per cent.

Last month saw 84 units purchased by foreigners, representing an almost 60 per cent increase from the 53 units sold in April.

Sun had noted that monthly sales among foreigners in the first month of this year were less than 30 units.

Similarly, there was a surge in the number of units bought by PRs last month, from 79 units in April to 142 units in May.

Sales to remain healthy in the coming months

Experts believe that new sales will remain healthy in the coming months, with more new launches on the cards.

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This includes AMO Residence and Lentor Modern, which Song expects will attract steady interest from upgraders and first-time homebuyers, who are largely unaffected by the recent cooling measures.

Earlier this month, a Chinese buyer reportedly bought 20 units in bulk at CanningHill Piers, amounting to over $85 million.

“In view of the limited new launch pipeline in 2022, CBRE Research expects new home sales to trend down from 2021’s 13,000+ units to a normalised 9,000 – 10,000 units, while prices could be flat or rise up to three per cent in 2022.

“Due to the larger impact of the cooling measures on investors and foreigners, volumes and prices in the CCR market might be affected more.

Nonetheless, prices are unlikely to collapse due to strong economic fundamentals, near record low unsold inventory (14,362 units as of Q1 2022) and high occupancies,” said Song.

This article was first published in