_Monthly Developer Sales - February 2023
There were 432 units (excluding Executive Condominiums ECs)) sold by developers in the month of February 2023, some 9.9% more than in January 2023. There were only two new launches in February comprising Terra Hill and Gems Ville. The slow start to 2023 continued to reflect the prevailing mood of cautiousness among buyers and developers. Developers’ restraint in launching new projects and buyers’ watchfulness are due to the combination of economic uncertainties, rising interest rates and inflation affecting development costs and household budgets.
The launch of Terra Hill in the Rest of Central Region (RCR) had the most sales during the month with 97 units, representing 35.7% of the entire project. Despite the current uncertainty, the Core Central Region (CCR) continued to sell in a steady manner, just as in January 2023. There were 222 new sales in the CCR from existing launched projects, maintaining the general momentum that started since April 2022 when Singapore borders were reopened. With high-net-worth individuals and families looking for family-size or larger units that would be ready to move in sooner rather than later, projects in the CCR that can cater to these requisites should be able to move units in 2023.
At the moment, the cumulative units launched but unsold continues to shrink, having reduced quite substantially by 37.8% y-o-y from 3,600 units in February 2022 to 2,238 units in February 2023, a year later. Eventually, there will come a time in 2023 when developers will be compelled to launch, and if pricing is right, pent up demand from the lack of new product has every chance of manifesting as buyer activity.
An example of things to come is The Botany at Dairy Farm where some 48% of the 386-unit project were reportedly sold upon launch in the first weekend of March. Both The Botany at Dairy Farm in the Outside Central Region (OCR) and Terra Hill also set new price benchmarks for their respective neighbourhoods, signaling that buyers are prepared to pay for new homes despite the present pessimism. Perhaps all that is needed are a few new headlining launches in a variety of locations islandwide that galvanises buyers waiting on the sidelines into action.
The aspirational ambitions of Singaporeans to upgrade to private property supported by steadily increasing household income and net-worth will overcome the obstacles of higher costs, higher borrowing rates, and higher taxes once the economic outlook stabilises and when a greater variety of launches become available with confidence surpassing the watch-and-wait tentativeness in the market. Notwithstanding the slow and uncertain start to 2023, Knight Frank maintains its projection of about 7,000 to 8,000 new sales during the year with private home prices projected to grow by 5% to 7% for the whole year.
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