According to DYC Industrial Consulting, the slowdown in housing market sales in November was due to several factors: a tighter economic environment, the end of the year being a low home-buying period, and the fact that some new developments will open next year.

According to the latest figures released by the Urban Redevelopment Authority of Singapore (URA) on Thursday (December 15), while developers launched 319 new private residential units in November, up 213 per cent year-on-year, the number of new private units sold in the same month fell by 17.3 per cent to 259.

Specifically by district, sales in the Core Central Region (CCR), which represents upscale private housing, the Outer Central Region (OCR), which represents mass private housing, and the Other Core Region (RCR), which represents mid-range flats, declined by 14%, 10% and 37% respectively in November.

While all three zones experienced varying degrees of decline in sales, the core Central Zone (CCR) remained better by comparison, accounting for 57% of total sales in November.

Sales in the Other Core Regions (RCR) and Outside Central Regions (OCR) accounted for 28% and 15% of total sales respectively.

According to Y.C. Tai Industrial Consulting, the lead in sales in the Core Central District is attributed to the 273 new units opened within the area.

In contrast, there were relatively few new units in the Other Core Regions (RCR) and Outside Central Regions (OCR).

In terms of unit size, demand for flats of approximately 93-140 square metres (1,000 to 1,500 square feet) in the non-landed new private sector in the Core Central Region rose, from 18 per cent of sales in October to 23 per cent of sales in the Core Central Region in November, according to an analysis by Dai Yuxiang Industrial Consulting based on data provided by the authority.

In terms of price, 30 per cent of homes sold in the Core Central Region (CCR) in November were priced between S$1.5 million and S$2 million, a price range that accounted for only 23 per cent of private home sales in October.

Of the ten best-selling properties in the Lion City last month, six were in the Core Central Region (CCR), another three in the Other Core Region (RCR) and one outside the Central Region (OCR).

According to Y.C. Tai's Director of Industrial Research and Consultancy, Mr Lan Zhenwen, this indicates that private home buyers are looking more at the value of the CCR, especially as prices of properties in other core areas and outside the OCR are gradually rising.

In addition, the selling prices of the 10 best-selling private residential projects remained high in November, with seven of them seeing an increase in median selling prices, with prices increasing by 5% month-on-month compared to October.

Lowest annual total sales in 7 years?

In its release, Dai Yuxiang Industrial Consulting said that a total of 7,000 new property units have been sold in the first 11 months of 2022 so far, and 7,500 new property units are expected to be sold for the year as a whole, which is nearly half the 13,027 units sold in 2021.

If this is indeed the case, it will also be the lowest number of units sold since 2015 (7,440 units sold).

Looking ahead, Mr Lan Zhenwen, Director of Industrial and Consulting at DYC, said homebuyers will be under pressure in 2023 due to multiple reasons such as the economic environment hitting headwinds, rising cost of living and slowing economic growth.

Moreover, rising mortgage rates will also limit buyers' budgets for home ownership. However, he also mentioned that the employment environment in Singapore is in good shape and salaries have increased, which has somewhat cushioned some of the impact of the general environment on home ownership.

Mr Lan Zhenwen, Director of Industrial Consulting at DYC, said that the resale HDB market is set to gain momentum in 2022, which will to a certain extent drive demand for private homes.

In addition, Singapore could also gradually attract more inward demand for home ownership as it serves as a haven for foreign investment.

Tai Ngoc Son Estate Consultancy expects that Singapore property developers are likely to set higher selling prices for new developments next, due to the low level of unsold housing stock and the tendency to balance supply and demand, as well as higher land and construction costs.

Lan Zhenwen expects private property prices to rise by 1-3% in 2023, a much lower increase than the 9% rise in 2022.

For the resale private residential market, DYC Industry & Consulting believes that the limited affordability (budget) of buyers will undoubtedly affect resale volumes and limit sellers' selling price expectations to some extent.

In the current environment of high property prices, sellers are historically the least likely to sell at a loss, and resale prices are only likely to fall in a severe economic downturn and a deteriorating employment situation, according to DYXA's Director of Property and Advisory, Mr Lan Zhenwen.

With the employment environment in Singapore remaining unchanged, rising mortgage rates will not affect house prices, but will affect sales.