SINGAPORE - A major new residential project launched just before Chinese New Year helped January’s private home sales to more than double to 391 from December, but some analysts see this as a slow start to the year compared with previous years.
Developers’ sales, excluding executive condominiums (ECs), jumped 130 per cent in January, from 170 units in December, largely due to robust sales at the 268-unit Sceneca Residence in Tanah Merah Kechil Link.
Sceneca, the first launch of 2023, sold 157 units at a median price of $2,083 per sq ft, accounting for 40.2 per cent of January’s sales, said Huttons.
But year on year, sales fell nearly 43 per cent from 684 units in January 2022, according to data released by the Urban Redevelopment Authority on Wednesday.
With ECs included, January’s sales fell 13.8 per cent to 550 units, from 638 in December, and down 25.3 per cent from 736 a year ago.
Mr Leonard Tay, head of research at Knight Frank Singapore, said January’s sales were low compared with the same month’s sales in the past three years. This reflected developers’ caution in the face of the slower economic outlook, rising construction costs and development risks, higher interest rates and inflation.
The raising of the buyer’s stamp duty (BSD) for higher-end residential and non-residential properties from Feb 15 adds to the climate of tentativeness in the private residential market, Mr Tay said.
Despite Sceneca’s good showing, some buyers may have been sidelined by higher home buying costs in an uncertain environment, and as they await the launch of more new projects in 2023. But transaction volumes could recover once there are more new launches, he added.
In January, 410 condo units (excluding ECs) were launched for sale, compared with a mere 45 in December. The number of units launched soared 130 per cent from 178 a year ago.
Upcoming new launches in the first quarter include the 275-unit Blossoms By The Park in Buona Vista, the 386-unit The Botany @ Dairy Farm, and the 600 plus-unit Lentor Hills Residences.
While the suburbs outperformed with Sceneca’s sales, the prime district came in second, accounting for 158 transactions, or 40.4 per cent of total volume, in January.
China’s reopening resulted in the return of wealthy mainland Chinese buyers to Singapore. They snapped up 57 units in January, up 58.3 per cent from December, said Huttons’ senior director of research Lee Sze Teck.
“Foreigners are likely to view the increase in buyer’s stamp duties as a transaction cost and a safe-haven premium on properties in Singapore. Most HDB upgraders buy at below $2 million and should be able to pay this marginal increase in property tax,” he said.
Mr Nicholas Mak, head of research and consultancy at ERA Realty, said he believes the increased BSD could put pressure on private property prices because “developers would have to pay higher BSD when they acquire development land and this cost may be passed to home buyers”.
But Mr Lam Chern Woon, head of research and consulting at Edmund Tie, said he sees the new BSD regime, which will now apply to properties priced above $1.5 million, “egging developers to cap their property quantum at a level in order to move sales”.
Nonetheless, Sceneca’s healthy sales launch could set the tone for upcoming major launches, said Ms Wong Siew Ying, head of research and content at PropNex Realty.
“With the upcoming launch of freehold Terra Hill in Pasir Panjang, and continued sales momentum at existing projects, we expect new home sales will likely cross the 500-unit mark in February,” she said.
The 270-unit Terra Hill is slated to launch on Feb 25. So far, it has drawn about 5,000 visitors to its sales gallery during a recent weekend preview, Ms Wong said.
