The primary property market in September 2022
The Singapore private residential property market became more active in September 2022 with more housing units launched and sold in the month.
Real estate developers launched a total of 913 private housing units, excluding Executive Condominium (EC) units, which were released for sale last month. This was a 6.8 times lump over the 134 units launched in August 2022. However, the number of units sold increased at a slower pace in September. Developers sold 987 private housing units, representing a 125.3% month-on-month (mom) increase.
Despite the economic uncertainty and rising interest rates, some homebuyers are still bullish on the property market as they acquire real estate both as a hedge against inflation and as a means to grow their retirement portfolio.
New residential launches in September
Two new residential projects, namely Lentor modern and Sky Eden@Bedok were launched in September. Although both projects are located in suburban areas, housing units in both developments were sold above the benchmark of $2,000 per square foot (psf). Housing units in lentor modern. and Sky Eden@Bedok were sold at the median prices of $2,108 psf and $2,118 psf respectively.
The relatively high price tags did not deter homebuyers as both projects enjoyed a strong take-up rate. Last month, 84.6% of the 605 units in Lentor Modern were sold, while 76.6% of the 158 units in Sky Eden exchanged hands.
Graph 1: Private residential ordinary sales market
One of the reasons for the popularity of these two projects is that each of them is located near a l\/IRT station. Lentor Modern is located next to the Lentor MRT Station, while Sky Eden@Bedok is situated within 300 meters of the Bedok MRT Station.
The robust demand for these new suburban condominium projects, despite the new benchmark prices in the current environment of rising interest rates, could be one of the reasons for the government to introduce the recent round of cooling measures
Table 1: New residential project launches in September 2022
Project name | Location | Total no. of units | No. of units sold | Median price ($ psf) |
Lentor Modern | Lentor Central | 605 | 512 | $2,108 |
Sky Eden @ Bedok | Bedok Central | 158 | 121 | $2,118 |
Market Share Among The Three Market Segments
The launch of these two highly anticipated projects spurred home sales in the suburban Outside Central Region (OCR). About 70% or 686 private residential property units sold in September were located in the OCR. This was a notable increase compared to August when 2l% of the private homes sold were from the OCR.
Although no new projects were launched in the Central Region, l98 units, or one-fifth of the private homes sold in September were from the prime Core Central Region. Developers sold TOE units in the mid-tier Rest of Central Region last month, which made up 10% of all the private homes sold by developers in that month.
Table 2: Number of private primary market housing units sold in each
Primary Property Market Activities in 3Q 2022
After increasing by 31.3% quarter-on-quarter (dog) in 2Q 2022, the primary residential property market sales volume slipped marginally in the third quarter of this year. Based on the preliminary figures, property developers sold 2,261 private housing units (excluding EC) in the third quarter of this year, 5.7% lower than the 2,397 units sold in the preceding quarter.
The lower sales were on the back of a drop in the number of private housing units launched in 3Q 2022. Developers released about 1,455 private housing units in the third quarter (based on monthly sales figures), which is 25.6% fewer than the L956 units released in the second quarter of this year.
However, the take-up rate of private residential properties in the third quarter was still very healthy. For every 100 new private housing units released by developers, 155.4 units were sold in 3Q 2022. As a result, the inventory of unsold housing units contracted further.
Outlook
The private primary housing market activities are likely to slow down in the last quarter of this year, mainly due to the seasonal year-end full period and mainly due to the lack of large suburban residential projects to be launched in 4Q 2022. Two of the biggest residential projects expected to be launched in the coming months are both EC projects, namely Copen Grand and Tenet. Some homebuyers are not eligible to buy EC units. Therefore, the launch of these two projects will not draw them to the market.
A third reason for the expected slower launch and sales activities is the latest round of market cooling measures. In our opinion, the first two reasons would exert a stronger impact on the private housing market in the fourth quarter. This is because the effects of the latest round of government intervention would be felt more in the HDB housing market It would take a few months for the effects to spread to the private housing market.
Table 3: Top 5 best-selling projects in September 2022
Project name | Location | Total no. of units | No. of units sold | Median price ($ psf) |
Lentor Modern | Lentor Central | 605 | 512 | $2,108 |
Sky Eden @ Bedok | Bedok Central | 158 | 121 | $2,118 |
Leedon Green | Leedon Heights | 638 | 31 | $2,876 |
Pullman Residences Newtown | Dunearn Road | 340 | 27 | $3,039 |
Perfect Ten | Bukit Timah Road | 230 | 23 | $2,946 |
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