Compared to January, total private property sales in Singapore rose by 9.9% to 432 units, driven by new launches. Sales of high-end private homes in the core Central District accounted for more than half of the sales as tighter financing conditions had less impact on high net worth individuals.
More private residential projects are expected to come on stream in the second quarter of this year as the market gradually absorbs the negative impact of the cooling measures late last year and the new Budget adjustments.
According to the Urban Redevelopment Authority of Singapore, sales of new private homes, excluding executive condominiums (EC), climbed by 9.9 per cent to 432 units compared to the previous month. This was mainly due to the opening of Terra Hill, a new project in the other core area (RCR), which represents mid-range condominiums.
Terra Hill sold 97 units in February, accounting for 22% of total sales. Terra Hill is a freehold development and its proximity to Pasir Panjang MRT station, coupled with the future development potential of the Greater Southern Waterfront, has resulted in significant sales. In addition to the 270 units newly launched on the market at The Peak, Gems Ville, also in the other core area, also opened in February with 24 units.
In terms of location, private residential sales in the Central Core (CCR), which represents upscale private residential, accounted for 51% of total sales in February, while sales in the Other Core (RCR), which represents mid-range flats, and Outside Central (OCR), which represents mass private residential, accounted for 38% and 11% respectively. 401 new private residential units were launched in February, a slight decrease from the 410 units launched in January.
Unlike the other core districts and the core Central District, sales of private homes outside the Central District decreased in February due to a lack of new launches. Because of the weaker impact of tighter financing conditions, private homes in the Central core were in high demand, with many buyers actively acquiring better value for money real estate units in the area.
Seven of the top 10 best-selling real estate projects in February were located in the Core Central Region (CCR), which represents upscale private housing, two in the Other Central Region (RCR), which represents midscale private housing, and one outside the Central Region (OCR), which represents mass-market private housing.
It is worth noting that of these ten best-selling real estate projects, only four had higher median prices, with an average increase of 2.1 per cent over January, while the prices of the other five projects fell by an average of 4 per cent compared to the previous month, according to DYXA Property Consultancy.
Lan Zhenwen, Director of Industrial Research and Consultancy at DYC, expects project openings to gain more momentum in the second quarter of this year. By then, the market will have more fully absorbed the impact of last September's cooling measures, as well as the recent increase in buyer's stamp duty (BSD) in the Budget.
With higher borrowing costs, homebuyers are likely to remain price-sensitive, especially for projects on the fringes of city centres or on the outskirts of the city," according to Lam. In today's uncertain economic outlook, I am afraid that the average project will not easily raise its price when it opens next, except for those in special locations and with distinctive designs. All in all, with the current tight labour market and rigid demand for home ownership still present, sales in the new private residential market are still expected to recover to 8,000 to 9,000 units as more projects open."
Following the announcement of this year's Singapore Budget, buyers of residential projects in Singapore of S$1.5 million and above will be required to pay more buyer's stamp duty, which may cause some slight knee-jerk reactions in the high-end property market," said Lan Zhenwen. But with mainland Chinese investors expected to return to Singapore to invest in real estate, demand for high-end properties will still be maintained, especially in prime locations and fringe areas of the city."