The lack of major non-landed residential project launches in June resulted in a sharp drop in the number of units launched to just 31. This represents a 98.1% decrease from May 2023 and a 92.2% decrease year-on-year. This is the lowest level since December 2022, when only 45 units were launched for sale, reflecting the tight supply of unsold units in the market.
Lavender Residence, a 17-unit boutique development on Lominda Street, was launched in June at a median price of S$1,972 psf. The freehold development in the Other Central Region (RCR) attracted buyers with its competitive price per sq ft and affordable freehold residential price point, with buyers purchasing eight units, or 47.1% of the total number of units.
Despite the slowdown and previous cooling measures during the month, projects in the Core Central Region (CCR) still accounted for 40.3% or 112 units of total sales in June. Core Central (CCR) typically sees more foreigner purchases than Other Central Regions (RCR) and Outside Central Regions (OCR). However, the April 27 cooling measures reduced the number of foreigners purchasing homes in the Core Central Region (CCR) to just seven in June, the lowest level since February 2021, when only six foreigners purchased homes in the Core Central Region (CCR).
In June, the percentage of purchases by foreigners in the Core Central Region (CCR) plummeted to 6.3%, the lowest level since April 2021, when foreigners purchased 5.4% of homes.Local citizens accounted for nearly 80% of purchases in the Core Central Region (CCR) in June. More locals are choosing to buy Core Central Region (CCR) homes as the price gap between CCR and RCR homes narrows.
Overall, the number of foreigners buying residential properties in Singapore continued to fall in June, following cooling measures. According to Urban Redevelopment Authority (URA) data, there were only 13 such purchases, a 56.7% drop from the 30 transactions in May 2023.
The lowest number of purchases by foreigners was in April 2020, which coincided with the period of blocking measures. Despite the cooling measures, the continued purchases by foreigners reflect the fact that the local real estate market remains attractive to them. In terms of share, the proportion of foreigner purchases soared to 4.7% in the June quarter. This could be attributed to the lower total number of purchases in June, which amplified the share of foreigners.
Sales in the Core Central Region (CCR) accounted for 40.3% of total sales in June, with the share of S$2 million and above sales jumping to 64.6%, compared to 46.3% in May.
Four projects - Grand Dunman, Lentor Hills Residences, Pinetree Hill and The Myst - were launched for sale in July. These four projects sold more than 1,100 units during the launch weekend. As a result, the developer estimates that it sold between 1,200 and 1,400 units in July. The strong sales of these 4 projects have boosted the confidence of buyers of private residential units, whether for investment or owner-occupation, as all 4 projects saw strong and healthy take-up across a wide range of unit types and sizes. Upcoming projects to be launched in August include Altura (executive condominium), Mattar Residences, Orchard Sophia, The Arden and The Lakegarden Residences. Bukit Batok has not launched an executive condominium for 22 years.
In addition, executive condominiums receive an upfront reduction in the Additional Buyer's Stamp Duty (ABSD), so Altura is likely to attract strong interest from first-time buyers and HDB upgraders.
Mattar Residences is a freehold development within walking distance of Mattar MRT station.Mattar Residences is expected to be granted temporary occupancy by July 2023 and hence will appeal to buyers who are looking for a new home that they can move into immediately. Orchard Sophia is a freehold development in the private residential area of Sophia Road, District 9. It is within walking distance to the Domecq MRT interchange and Plaza Singapura.
The Arden is a 99-year leasehold project in Phoenix Road. The last project to be launched in the area is Phoenix Residences in December 2020, and The Arden should generate a lot of interest.
The Lakegarden Residences will be the first private residences to be launched next to Jurong Lake, and the scarcity around Jurong Lake will pique buyers' interest.
US inflation has slowed to 3.0% in June 2023, down from a 40-year high of 9.1% a year ago. This could mean that the Fed's monetary tightening may be coming to an end and interest rate hikes may be on hold. This will boost the real estate market.
Developers expect nearly 3,500 units to be sold in the first half of 2023 and more than 4,700 in the first seven months of 2023. With more properties coming on the market, the market is expected to sell about 8,000 units in 2023, with prices rising by 5% .
