A shortage of major condo launches dampened Singapore’s new private home sales in October, with transactions plunging 68.4 percent from the previous month to 312 units sold.
The Core Central Region led sales in October, with 171 units changing hands to account for 55 percent of the monthly total. The city-fringe Rest of Central Region and the Outside Central Region saw declines of 21 and 91 percent to 81 and 60 new units sold, respectively.
“The September cooling measures and low unsold inventory in the market delivered a one-two punch to new home sales in October, as the monthly transaction volume retreated to its lowest since April 2020, when the circuit breaker was first imposed to curb the spread of COVID-19,” said Wong Siew Ying, head of research and content at PropNex.
Prices Up 19% YTD
Just two new projects were launched in October: the 25-unit Enchante on Evelyn Road and landed homes at Pollen Collection on Nim Road, with each development selling a mere two units.
The median transacted price of non-landed new private homes (excluding executive condos) in October was S$2.26 million (now $1.65 million), up 19 percent from January’s level.
“The fact that the CCR accounted for more than half of the month’s sales likely contributed to the higher median price in October,” Wong said.
Prices rose at six of the 10 top-selling projects in October, according to Lam Chern Woon, head of research and consulting at Edmund Tie. The six projects, all located in the CCR, were Perfect Ten, Hyll On Holland, Haus on Handy, Leedon Green, Fyve Derbyshire and The Avenir, the last of which led with a median price of S$3,385 per square foot.
“In anticipation of a knee-jerk reaction to the latest cooling measures from the market, developers refrained from launching new units, while giving the market ample space to digest the new measures,” Lam said.
Muted Short-Term Activity
The latest housing curbs, which included raising the medium-term interest rate floor by half a percentage point for residential property loans, are likely to result in buyers and sellers becoming more cautious, said Ong Teck Hui, senior director of research and consultancy at JLL in Singapore.
“If the market trend in October continues, and with the December holidays coming, we may expect muted market activity” in the fourth quarter, Ong said.
Looking further ahead, PropNex expects overall home prices to climb by 5 to 6 percent in 2023, down from an anticipated rise of 9 to 10 percent this year, as cooling measures and macroeconomic uncertainties slow the pace of price increases.
“While housing demand largely remains supportive of the market, the rising home loan rates and recent news about job cuts in the tech sector may unsettle some buyers and we do expect sentiment to turn more cautious,” Wong said.