The downturn in new home sales was due to no major launches in November.
Developers launched 319 housing units excluding EC last month, mostly in small launches, and the market responded lukewarmly.
While the number of units launched in November was three times the 102 homes launched in October, it was down 75 percent year-over-year.
Three smaller projects launching in 2022: Hill House, Kovan Jewel, Sophia Regency
The low unsold inventory of new homes, especially in the Outer Central Region (OCR), contributed to the lukewarm sales month.
According to URA data, most existing OCR projects are 80 to 100 percent sold, leaving buyers with limited options.
Meanwhile, other factors contributing to the decline in sales included uncertainty from the new real estate market curbs announced on September 29, a seasonal year-end lull and a weak economic outlook.
All three regions - Core Central Region (CCR), Rest of Central Region (RCR) and OCR - saw sales decline in November.
In the CCR, excluding the EC, 148 units were sold, accounting for 57 percent of monthly sales and down 15 percent from the 172 units sold in October.
The top-selling project in the CCR was Leedon Green, which had 16 units sold at a median price of $2,851 per square foot.
One Holland Village Residences was the next top performing CCR project with 15 units sold at a median price of $3,154 per square foot.
In the RCR, the developer sold 73 new units, accounting for 28% of monthly sales. This represents a 10% decline from the 81 units sold in October.
The most popular RCR project was Riviere, which sold 19 units at a median price of $3,024 per square foot.
Riviere, which is expected to receive its Temporary Occupancy Permit (TOP) in the first quarter of 2023, has been steadily selling units over the past several months. As of November, the 455-unit project was 87 percent sold.
The Landmark was the second best-selling RCR project, with 13 units sold at a median price of $2,459 per square foot.
In OCR, excluding EC, only 38 units sold, down 37% sequentially, due to a lack of mass launches and depletion of unsold inventory.
Lentor Modern was the top-selling project in OCR, selling nine units at a median price of $2,218 per square foot.
Top 10 best-selling projects for October 2022.
Median new home sales prices both strengthened. median new home sales prices in CCR were up 4.5% from Q1 2022, while prices in RCR and OCR were up 24.9% and 19.9%, respectively.
The significant price increases in the RCR and OCR were attributed to continued demand from owner-occupied buyers. In addition, RCR is also generating interest from investors.
RCR outperformed CCR given its price and rental competitiveness, while OCR also received broad support from HDB upgraders.
In addition, the number of foreign buyers for new home sales increased in November. Foreign buyers purchased 51 new homes last month, accounting for 19.7% of sales for the month. This is higher than the 32 units recorded in October (11.3% of October sales). This is the largest percentage since foreigners accounted for 20.2% of total purchases in September 2011.
Units sold to foreign buyers included a unit at Les Maisons Nassim for $36 million and three units at Park Nova.
Meanwhile, new home sales, including ECs, were 445 units in November, down 45.1% from 811 units in October. Of the 186 EC units sold in November, 176 were from Copen Grand, with units selling at a median price of $1,323 per square foot.
Copen Grand, which launched with 639 units in late October, is now sold out.
Copen Grand showed positive sales to the market as it was the top selling project in October and November. Such healthy sales performance of EC is derived from the demand of buyers who find EC as more affordable condominiums and therefore highly attractive.
With the release of November's sales data, total new home sales excluding EC reached 6,981 units from January to November, 44% below the level of the same period in 2021.
Meanwhile, new home sales including EC were 445 units in November, down 45.1% from 811 units in October.
Of the 186 EC units sold in November, 176 came from Copen Grand, with units selling at a median price of $1,323 per square foot.
Copen Grand, which launched with 639 units in late October, is now sold out.
Copen Grand showed positive sales to the market as it was the top selling project in October and November.
Such healthy sales performance of EC is derived from the demand of buyers who find EC as more affordable condominiums and therefore highly attractive.
With the release of November's sales data, total new home sales excluding EC from January to November reached 6,981 units, 44% below the level of the same period in 2021.
New home sales excluding EC are expected to remain subdued in December as most major new home releases for the year have ended. However, sales momentum in EC is likely to be maintained with the support of Tenet.
Launched on December 3, the 618-unit EC in Tampines was snapped up on the first day of launch with 447 units.
Total new home sales excluding EC are forecast to be around 7,500 units in 2022, down by almost half from the 13,027 units sold in 2021. This year's sales will perhaps be the lowest annual sales since the 7,440 units recorded in 2015.
Accordingly, home prices are likely to be flat in the fourth quarter of 2022, bringing the annual price growth rate for 2022 to 8%. This is also a slowdown from the 10.6% increase in 2021.
Housing demand is expected to remain under pressure going into 2023; after all, people will need to deal with continued macro headwinds, high costs of living and slowing growth prospects.
In addition, interest rates may put pressure on housing affordability, but the pace of future rate hikes may slow, offering a "silver lining" to the market.
Given the lack of unsold inventory in the OCR, it is expected that upcoming projects in the area will attract market interest due to pent-up demand.
Projects scheduled to launch in the first quarter of 2023 include the 268-unit Sceneca Residence, the 598-unit Lentor Hills Residences and the 368-unit The Botany at Dairy Farm.
