_Monthly Developer Sales - December 2022
There were 170 units (excluding Executive Condominiums ECs)) sold by developers in the month of December 2022, which was the lowest monthly new sale volume for the whole of 2022. To find a monthly new sale total lower than December 2022, one would need to go back to the last economic crisis more than a decade ago to January 2009 when Singapore was still affected by the impact of the Global Financial Crisis. It is estimated that given the total of new sales in the first nine months of the year together with the monthly sales data from October to December, the total for 2022 is expected to be about 7,153 new home transactions, under Knight Frank’s earlier projection of 8,000 to 9,000 units. While most of 2022 was characterised by projects that captured homebuyer attention translating into brisk sales in the first weekend of launch especially in Q2 and Q3, there were also months where there were few prominent launches that resulted in comparatively lower volumes despite underlying homebuyer demand. In the first quarter of 2022, developers were hesitant to launch new projects due to the cooling measures that were announced in December 2021, while in the final quarter of the year, local homebuyers embarked on revenge travel and holidays after two years of being confined by the pandemic.
Nonetheless, domestic demand for new homes remained strong despite recessionary pressures, inflation, unrelenting interest rates hikes. Even though the EC, Tenet at Tampines Street 62 launched during the holiday period, sales were strong with 451 units sold out of a total of 618 in the month of December. It was reported soon after that total sales at the Tenet progressed to some 576 units, or about 93.2% of the project, showing that domestic demand for new product continues to undergird the new home market. With private home prices having risen by 8.4% (URA Private Residential Price Index flash estimates) in 2022, beyond the expectations at the beginning of the year when the December 2021 cooling measures set a conservative cloud on projections, ECs will be in demand among first-time home buyers and HDB upgraders throughout 2023 due to the more affordable prince levels inherent in this hybrid form of housing.
Without many launches in the final quarter of 2022, the Core Central Region (CCR) has been chalking up the highest monthly volumes in the months of October (173 sales), November (149 sales) and December (89 sales) accounting for more than half of all new sales within these months. These steady numbers suggest that high-net-worth homebuyers with private capital looking for safe investment opportunities and who might not be as reliant on debt financing, might be starting to purchase homes in the prime areas of the CCR. Perhaps transaction volume and prices of homes in the CCR will gain further momentum as quarantine requirements in China are relaxed.
In 2023, some 30+ new projects could possibly launch island-wide consisting of around 12,000 units that should bring some relief to the undersupplied situation and provide homebuyers with more product choices in a buffet spread of locations. That said, the greater volume and variety of new private stock comes at a time of economic uncertainty, employee layoffs in the technology sector, continued rising interest rates as well as the increased cost of consumption. Therefore in 2023, demand might turn more conservative with 7,000 to 8,000 new sales. In view of the above, private home prices are projected to grow by a more moderate 5% to 7% for the whole of 2023.