This figure is 13.9 per cent higher than the 432 units sold in February, but down 24.8 per cent from the 654 units sold a year ago.

The 492 new units sold were 43.8% below the five-year average of sales in March (876 units). This brings new home sales in the first quarter of 2023 to 1,318, down 29.9 per cent year-on-year from 1,880 in the same period in 2022.

Purchases have largely slowed compared to the beginning of 2022, with buying sentiment becoming cautious amidst record high interest rates and a slowing economy.

In March, The Botany at Dairy Farm in the Outer Central Region (OCR) opened at the top of the list with 184 units sold at a median price of $2,068 per square foot.

Units sold at The Botany at Dairy Farm accounted for 37.4% of total sales in March, increasing the proportion of sales in the OCR to 46.7% in March.

The Core Central Region (CCR) - a representative of the high-end residential sector - was the next most active area with 197 units sold (40%). CCR's projects dominated the top 10 best-selling projects in March.

The narrowing price gap between private homes in the Core Central Region (CCR) and the Rest of the Central Region (RCR) has made CCR properties attractive buying opportunities.

The median price gap between the CCR and RCR for all non-landed homes has narrowed from 44.6% in January to 30.5% in February and 24.4% in March.

Price upside for non-landed residential units in the CCR has diminished as a result of cooling measures and a shift in demand to more affordable market tiers. In addition, prices in the RCR are rising faster as a result of increased market demand and new projects starting at record prices.

Projects contributing to the growth in new home sales in the CCR include Leedon Green, with 26 units sold in March at a median price of $2,957 per square foot; Pullman Residences Newton, with 21 units sold at a median price of $3,295 per square foot; and Hyll on Holland, with 18 units sold at a median price of $2,875.

The top sellers in the RCR were: The Landmark (24 units at a median price of $2,626 per sq ft); Riviere (nine units sold at a median price of $3,180 per sq ft) and Piccadilly Grand (eight units sold at a median price of $2,008 per sq ft). They accounted for 63% of sales in this market segment during the month.

New home prices strengthened significantly in March. Seven of the top 10 developments - namely Leedon Green, The Landmark, Pullman Residences Newton, Hyll On Holland, Klimt Cairnhill, Peak Residence and One Bernam.

As the inventory of unsold units dwindles, developers have the courage to raise prices in response to continued market demand.

The current buying trend appears to be more supply-led than demand-driven, depending to a large extent on the projects released during the month.

The higher buyer's stamp duty rates announced in Budget 2023 have reduced house prices to some extent. The share of new private homes sold at $1.5 million or more fell from 95 per cent in February to 72 per cent in March.

Developers may be shifting to one- and two-bedroom units in new developments to limit the volume and psychological impact of higher Buyer's Stamp Duty on prices for mainstream buyers.

One and two bedroom units at The Botany at Dairy Farm are almost sold out. Investors have been flocking to these units due to rental demand from the European International School in Germany next door. Smaller families also favour two-bedroom units. Meanwhile, home upgraders preferred three-bedroom units.

Foreign buyer purchases accounted for 38 (7.8%) of new home sales in March. Foreigners accounted for 73.7% of the units purchased at CCR in March.

Although China has lifted a number of Covid-19 restrictions, it may take some time for foreign demand to recover more significantly.

The location of new project launches will also have an impact on foreign demand versus local demand. The urban fringe and suburban projects launched in recent months are likely to attract more local buyers.

Upcoming launches in April and May include the 275-unit condominium Blossoms By The Park (at RCR), the upcoming 816-unit condominium The Continuum at Thiam Siew Avenue (RCR), the Newport Residences (CCR), the 598-unit Lentor Hills Residences (OCR) and the 732-unit The Reserve Residences (OCR).

Between 8,000 and 9,000 new homes are expected to be sold in 2023, supported by new launches this year. However, with momentum in the open resale market slowing and financing and borrowing costs remaining constrained, risks are skewed to the downside.

While the rental market is under pressure due to increased completions this year and in 2024, pricing momentum remains positive as rising land and construction costs lead to new projects being launched at higher prices.

Overall private residential prices are expected to continue to rise by 5-7% in 2023, following 8.6% growth in 2022 amid growing economic headwinds.