_Monthly Developer Sales - May 2023

Demand for units in the CCR is more resilient and regular as high-net-worth buyers invest in the safety, stability and security of primes residences

Leonard Tay June 15, 2023

There were 1,038 units (excluding Executive Condominiums (ECs)) sold by developers in the month of May 2023, some 17.0% more than in April 2023. This totaled 3,181 units sold in the first five months of the year based on the data for developers’ sales from URA and 1,256 new units sold in Q1 2023. Newly launched projects during the month of May accounted for the highest volume during the month, with The Reserve Residences and The Continuum recording the highest project sales of 523 (71% of the total 732 units) and 225 (about 28% of the total 816 units) respectively. As these two projects are in the Rest of Central Region (RCR), this region recorded the highest number of sales at 847 units, or almost 82% of developer sales in May. The Outside Central Region (OCR) had the least number of developer sales at a mere 39 units, even though there are 1,768 unsold units with 548 units already launched.

Even though the government measures that took effect at the end of April 2023 resulted in a prohibitive doubling of the Additional Buyer’s Stamp Duty rate for foreign buyers, there were 152 units sold be developers in the Core Central Region (CCR). The CCR characterises prime homes in Singapore where a large proportion of buyers are typically foreigners. Primary sales volume in the CCR remains fairly consistent in light of the new cooling measures, persistently above the 100 unit level (with the exception of December 2022 where there were 89 transactions), from March 2021 more than two years ago, even though newly launched projects in the CCR were comparatively limited over that period.

Based on the monthly developer sales data from June 2022 to May 2023, there were 2,160 sales in the CCR, 2,524 in the RCR and 2,052 in the OCR, corresponding with 1,343 (CCR), 2,849 (RCR) and 1,941 (OCR) units launched respectively. Therefore, the CCR has the highest ratio of units sold to the number of units launched in the past one year at 1.6 units sold to every 1 unit launched, while the OCR had a ratio of 1:1 and the RCR a ratio of 0.9:1 (notwithstanding the carry-over/cumulation of unsold units prior to the past 12 months). This suggests that demand for units in the CCR is more resilient and regular as high-net-worth buyers invest in the safety, stability and security of primes residences, regardless of their nationality, and appear to continue to do so in May on the back of the most recently ABSD rate increases.

With the government reporting that 90% of private home buyers comprise citizens and permanent residents buying their first property, demand for new product will continue to be firm throughout 2023 as new projects are launched, so long as the price points are within the affordability levels of this type of buyer. Potential foreign homebuyers are likely to adopt a wait-and-see posture for the time being to assess the impact of the new measures on the prime segment of the market.

Nevertheless, as the world increasingly becomes blighted with economic and political uncertainty, some of the globally mobile wealthy might still invest in the stability of prime homes in Singapore as a hedge against global volatility. With 3,181 new sales in the first five months of 2023, and with an estimated 8,000 units left to launch in the remainder of 2023, the total expected number of new sales is expected to range from 7,000 to 8,000 units as earlier projected by Knight Frank at the end of 2022.

_Monthly Developer Sales - May 2023

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