New private home sales catch chill from cooling measures with 58% drop in December

Sales slumped 58 per cent to 650 units last month from 1,547 units in November. PHOTO: ST FILE

SINGAPORE - New private home sales in the final month of 2021 were hit by property cooling measures that kicked in in the second half of December on top of the usual year-end seasonal lull.

Sales slumped 58 per cent to 650 units last month from 1,547 units in November, according to Urban Redevelopment Authority (URA) data on Monday (Jan 17). The figures exclude executive condominiums (ECs).

Year on year, take-up was down 46.6 per cent, from 1,217 units in December 2020.

Developers meanwhile launched for sale just 383 new units last month as they waited to see the impact of the latest property curbs. Launches were down 70 per cent from 1,283 units in November, and 71.6 per cent lower than the 1,349 units in December 2020.

For the whole of last year, new private home sales totalled 13,118 units, the highest number since the 14,948 units sold in 2013.

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said the double whammy of cooling measures and the year-end holiday season weighed on December's sales, although the figures may not yet fully reflect the impact of the measures.

Ms Sun said the pullback in sales is expected to be temporary, as, historically, demand starts recovering around six months after cooling measures, as they did after the previous round in July 2018 .

Last month, the five best-selling projects were Normanton Park, Mori, Dairy Farm Residence,  The Florence Residences and Leedon Green.

Including ECs, new home sales fell 55.4 per cent to 719 units in December, from 1,611 units in November. Compared with a year ago, new sales, including ECs, dropped 43 per cent, from 1,265 units in December 2020.

Excluding ECs, the suburbs accounted for 44.9 per cent of total sales, followed by the city fringes at 34.5 per cent and central Singapore at 20.6 per cent.

Mr Lam Chern Woon, head of research and consulting at Edmund Tie said the top seller last month was Normanton Park in the suburbs which sold 73 units at a median price of $1,831 psf.

"Properties in the suburbs continue to remain attractive, with demand driven by a desire to stay closer to the city and sought-after locations," said Mr Lam.

Huttons Asia senior director of search Lee Sze Teck said developers' sales in December tend to be lower than in November, and only December figures in 2012 and 2020 have exceeded November's.

On average, developers sold 594 units, excluding ECs, in the month of December from 2007 to 2020.

"In comparison, December 2021's tally of 650 units is within expectations," he said.

Mr Lee noted that there is currently only one development set to launch this month, a freehold strata-landed project Belgravia Ace in Seletar, off Ang Mo Kio Avenue 5.

"It's likely to be the largest freehold strata-landed project this year. A strong sell-out for the project will send a positive signal to the market," said Mr Lee.

In December, 32 per cent of transactions were priced below $1.5 million, 32.5 per cent between $1.5 million and $2 million, and the remaining 35.5 per cent at above $2 million.

The top seller in December was Normanton Park in the suburbs, which sold 73 units at a median price of $1,831 psf. PHOTO: NORMANTON PARK

Singaporeans made up the bulk of buyers, with 83 per cent of units sold, while permanent residents accounted for 12.6 per cent and foreigners 4.2 per cent.

According to Huttons, developers sold 69 EC units in December, with just 125 unsold EC units estimated to be left in the market.

Knight Frank Singapore head of research Leonard Tay said the cooling measures have "clouded" the private residential market outlook for 2022 after a strong run from the end of the circuit breaker in 2020 right through 2021.

He expects buyers to be more tentative with their purchases, thus affecting volumes and prices in the first quarter of this year, although demand may increase from the second quarter onwards.

"A lack of inventory will continue to underpin demand, with 17,140 unsold units in the market as at the third quarter of 2021, down from about 24,300 at the end of 2020," he said.

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