Singapore (Edgeprop) – Developers sold 650 new residential units (excluding executive condos or ECs) in December 2021 – a decline of 58% from the 1,547 units sold in November.
Including ECs, new home sales fell by 55.4% m-o-m, from 1,611 units sold in November, to 719 units in December.
Compared to 2020, new sales excluding ECs declined by 46.6% y-o-y from 1,217 units.
Consultants say the lower sales volume was expected as Singapore’s most recent cooling measures took effect in the month, on top of fewer project launches in the last month of the year.
Impact of property cooling measures
With effect from Dec 16, the additional buyer’s stamp duty (ABSD) has been raised, and the total debt servicing ratio (TDSR) threshold has been tightened. The loan-to-value (LTV) limit for loans from HDB is reduced from 90% to 85%.
However, December’s new home sales may not reflect the full impact of the cooling measures on the property market, as “a number of deals were closed before the property curbs kicked in on Dec 16”, observes Christine Sun, senior vice president of research & analytics, OrangeTee & Tie.
“Based on URA realis caveat data, about 60% of the sale transactions of new homes (including EC) were closed in the first half of the month, while 289 units were sold in the second half,” she adds.
Leonard Tay, head of research at Knight Frank Singapore, says: “As with past announcements of government measures to temper demand in the private home market, there would be the inevitable pause as buyers, sellers, developers and investors alike take stock of the new parameters and their effects on demand and price.”
However, consultants believe the new cooling measures are unlikely to deter new homeowners, or households holding only one property at any one time.
“Owner-occupiers looking to upgrade and right-size are generally unaffected by the ABSD revisions and will constitute the majority of buyers in 2022,” says Tay.
“Therefore, for new families acquiring their first home, as well as families who upgrade from one home to the next – essentially households which own only one property at any one time, which have been the key buyer profile in the past 18 months – the new ABSD rates would have a muted impact,” he adds.
“The increased ABSD rates will affect home buyers purchasing second and subsequent properties for investment purposes and for recurring rental income much more severely than those buying their sole home for owner-occupation. These buyers will likely adopt a wait-and-see approach in the months ahead, with the expectation that prices will drop,” he says.
The Rest of Central Region (RCR) led new home sales with 292 units sold, followed by the Outside Central Region (OCR), at 224 units, while the Core Central Region (CCR) saw 134 units sold.
Over the month, there were only 383 units launched, as compared to 1,283 units launched in November. The number of new launches in the month also recorded a fall of 71.6% y-o-y, from the 1,349 units launched in December 2020.
The projects that were newly launched in the month included Mori, Perfect Ten and Zyanya.
The best-selling project in December was Normanton Park, in the RCR, which sold 73 units at a median price of $1,831 psf.
“In terms of median prices in December 2021, a 1.9% m-o-m increase from $2,976 to $3,033 psf was recorded by new homes in the CCR, 0.3% m-o-m growth ($1,674 to $1,679 psf) for OCR, while a m-o-m decline of 1.8% ($2,221 to $2,182 psf) was recorded for new homes in the RCR,” says Lam Chern Woon, head of research & consulting at Edmund Tie.
Looking ahead, consultants expect the property market to bounce back, citing a market supported by “robust labour market, ongoing economic growth, and healthy demand-supply dynamics in the property market”, says Lam.
