Demand for new private homes in the Core Central Region (CCR) – a proxy for high-end and luxury homes – rose for the second straight month in April 2022 amid the further easing of Covid-19 rules and travel restrictions as Singapore transits to living with Covid-19.

The stronger CCR sales have helped to support the overall new private home sales last month, as developers sold 653 new private homes (ex. Executive Condos) – largely on par with the 654 units transacted in March. On a year-on-year basis, new home sales fell by nearly 49% in April 2022 from the 1,270 units shifted in April 2021, where new launches Irwell Hill Residences and One-North Eden boosted sales then.

In April 2022, new homes sales in the CCR were up by 34.6% MOM to 206 units, following the 39.1% MOM increase in March. The CCR accounted for 31.5% of the overall new home sales last month and it is the only sub-market that posted month-on-month increase in new private home sales in April. The best sellers in the CCR last month were The Avenir which sold 23 units at a median price of $3,227 psf and Fourth Avenue Residences which transacted 21 units at a median price of $2,500 psf.
Meanwhile, new home sales in the Rest of Central Region (RCR) and Outside Central Region (OCR) fell by 9.7% and 12.7% respectively from March to April, amid dwindling unsold stock and a dearth of major launches.

Developers sold 289 new units in the RCR which included 52 units transacted at Normanton Park at a median price of $1,861 psf and 35 units sold at Riviere at a median price of $2,779 psf. New home sales in the OCR posted a steeper monthly decline, falling by 12.7% MOM to 158 units in April as the inventory of unsold new homes dropped to a record low of 3,890 units as at the end of Q1 2022. The top selling projects in the OCR in April were The Florence Residences which sold 24 units at a median price of $1,717 psf. 

Following the muted sales performance in Q1 2022, the private home sales market continued to grapple with a limited supply of new launches in April. In April, developers placed 397 new units (ex. ECs) for sale compared to 309 units launched in March – most of the units placed on the market in April were from past-launched projects. 

The dearth of major launches – especially in the mass market – has stymied overall developers’ sales, amid challenges such as higher ABSD rates for foreign buyers and investors, rising interest rates and inflation risks.

In April, while Singaporeans continued to account for a lion’s share of new home sales, we note that more foreign buyers have returned – perhaps helped by the easing of Covid-19 rules and travel restrictions in Singapore. Based on URA Realis caveat data, the proportion of new private homes purchased by foreigners rose across all sub-markets from March to April.

Foreign buyers accounted for 13.1% of private new home sales in the CCR in April, up from 9.9% in March. The corresponding figures for RCR and OCR were also higher at 9.4% and 3.2% respectively in April, compared with 2.9% in RCR and 1.1% in OCR in the previous month.

Despite the ABSD hike, Singapore remains an attractive destination for foreign investors and the residential property market could benefit from safe haven capital flows, amid geopolitical uncertainty arising from the Russia-Ukraine war.

Based on caveats lodged, about 45.5% of the new private non-landed homes transacted in April 2022 cost under $2 million (see Chart 1) – down from March’s figure of 56%. Most of these purchases below the $2-million mark comprised homes located in the OCR (36.9%), followed by the RCR (36.3%) and the CCR (26.8%).

According to URA Realis caveats data, the median transacted prices of new non-landed
private homes (ex. ECs) rose across the three sub-markets in April 2022, with the RCR seeing the biggest jump. The median transacted price surged by 21.5% MOM to $2.24 million in the RCR, CCR median price climbed by 8.2% MOM to $2.28 million, while the median price in the OCR inched up by 1.3% MOM to $1.76 million in April.

Outlook 

With the anticipated increase in mortgage interest rates, there could be more prudent
homebuyers out in the market seeking to right-size their purchase, by opting for smaller units with a more manageable price quantum. Some buyers may also decide to enter the market sooner in order to lock in more favourable mortgage rates, which are expected to continue to inch up this year. For investors, they will likely be concerned about the prospects of a prolonged increase in interest rates which may potentially erode rental gains when they lease out the units in the future. With more considerations to contend with, buyers may take more time to assess their options before deciding on the home purchase. 

Additionally, inflationary pressures and rising costs – including construction and manpower costs – will likely see home prices creep up. As real estate is commonly seen as a good hedge against inflation with values tending to appreciate over time, buyers and investors may enter the market to pick up units to hedge against inflation risk.
Looking ahead, private home sales are expected to pick up as more new projects are being launched for sale. Some upcoming launches in May and June include Liv@MB, Atlassia, Baywind Residences, and The Arden.