_Monthly Developer Sales - March 2022
Primary sales in the private residential market in March 2022 increased by 20.7% to 654 units (excluding Executive Condominiums (ECs)) when compared to the 542 units in February 2022. During the month, majority of the sales were located in the Rest of Central Region (RCR), where Normanton Park was again the top seller recording 83 transactions. Normanton Park has been the monthly top seller in Q1 2022 and for the past four consecutive months now with a mere 114 unsold units left out of 1,862 (6.1% left unsold). As the first quarter of 2022 was characterised by a dearth of new launches, there was a total of 320 new sales in the RCR, 181 sales in the Outside Central Region (OCR) and 153 sales in the Core Central Region (CCR). Despite the watch-and-wait reaction to the cooling measures witnessed during Q1 2022, underlying demand remains strong should buyers be able to find suitable homes. However, with developers largely reluctant to make any first move to replenish stock so soon after the announcement of the measures, new sale volume in Q1 2022 is estimated at 1,880 units, some 42.3% below the average quarterly primary volume of about 3,257 units in 2021.
Unlike the market situation after the announcement of the previous 2018 cooling measures, there is greater urgency today in what is almost a perfect storm. New inventory has been delayed to the market amid supply-chain disruptions at a time when future supply from land sales remains moderate amid dwindling unsold stock and expected interest rate hikes. Yet, underlying demand for private homes by owner occupiers continues to remain firm with many in search of new homes. In Q2 2022, underlying fundamental buyer demand is expected to re-establish itself, especially when a substantially sized project that captures the public imagination is launched. For example, the North Gaia Executive Condominium with 616 units, or the 407-unit Piccadilly Grand at Northumberland Road. Owner occupiers are generally unaffected by the Additional Buyer’s Stamp Duty (ABSD) revisions and will comprise many of the buyers in the remainder of 2022. Despite the slow start to 2022, new sale volume could reach around 8,000 to 9,000 units as the number of units available for sale keeps paring down each passing month, and at the same time, pent up demand continues to build up during the relatively quiet Q1 2022.
Based on the developer sales data that was released today, the CCR has the largest proportion of 3,820 unsold units (launched and unsold, as well as ready to launch), representing some 49% of the unsold stock (an estimated 7,767 unsold units) across all market segments. Therein lies a potential silver lining for the CCR as Singapore takes game changing steps towards endemic living with COVID-19. The easing of social restrictions as well as greater cross-border travel from the new Vaccinated Travel Framework (VTF) might finally signal a turnaround, stirring foreigners to start capitalising on value opportunities in the CCR. Although some foreigners might be deterred by the increase in Additional Buyer’s Stamp Duty (ABSD), others might still be interested in purchasing luxury homes in the CCR as prices did not increase as much and value opportunities abound. Given the amount of anecdotal interest and enquiries from potential foreign homebuyers, and the fact that the global pandemic has created a premium on stability in an uncertain world, the globally mobile wealthy may still be prepared to pay the 30% ABSD as a premium for entry into Singapore’s prime residential market.