Thailand
Singapore: New private residential units sold in February up 9.9% from January, but still down 20.3% year on year
SALES of new private residential units rose for the second straight month in February, supported by sustained buying by foreigners. But year on year, sales were still down.
The Urban Redevelopment Authority (URA) on Wednesday (Mar 15) said that developers sold 432 units, excluding executive condominiums or ECs in February, up 9.9 per cent from the 393 units moved in the previous month.
This is despite there having been 2.2 per cent fewer than the 410 units launched for sale in January.
Year on year, the number of units sold in February was 20.3 per cent lower than the 542 units sold in 2022. But the number of units launched for the month rebounded 105.6 per cent from the 410 units launched in 2022.
Including ECs, 470 units were sold in February, down from the 550 units sold in January and 574 units sold in 2022.
OrangeTee & Tie’s senior vice-president of research and analytics Christine Sun said the sales performance in February was encouraging, given that buyers had to deal with high interest rates, cooling measures and only one mid-sized and one small project launched.
Sun added that the increase in buyer’s stamp duty (BSD) on Feb 14 is likely to have a greater impact on the primary market, which has a higher price quantum than the resale market.
According to URA data, 94.7 per cent of new homes (excluding ECs) were sold for at least S$1.5 million in February, compared to only 53.8 per cent of resale homes that were sold at that price level.
“However, most buyers may not feel that the increase in BSD is excessive, especially if the amount is expressed as a percentage of the total purchase price and if the homes were bought for owner occupation or a long-term investment,” Sun said.
Foreign investors and luxury-home buyers are also unlikely to be deterred by the increase in BSD because luxury homes tend to have unique attributes on which ultra-high-net-worth individuals are willing to splurge, she added
Huttons senior director of research Lee Sze Teck, echoing the point, said the marginal increase in BSD this year has not deterred buyers from purchasing a property. He cited Terra Hill as an example; launched after the increase in BSD, it went on to sell 97 units – the highest number for February.
“Buyers are viewing the marginal increase in BSD as a wealth tax, and it is not deterring them from buying a residential property,” he said.
The number of purchases made by foreigners stayed elevated at 12.6 per cent in February, above the 7.1 per cent level for the whole of 2022, Huttons noted. The 54 units purchased by foreigners was slightly higher than the 53 units in January.
According to Hutton’s ground intel, this figure was supported by Chinese buyers purchasing some units in the luxury projects in the core central region (CCR).
The bulk of February’s transactions were from the CCR region, consisting of 51.4 per cent of total sales at 222 units sold, excluding ECs. This was followed by 163 units in the rest of the central region (RCR) and 47 units outside the central region (OCR).
RCR had the highest number of units launched in February – 294, followed by 107 units in CCR. There were no units launched in OCR for the month.
Most launched projects in CCR continued to clear their unsold units last month, OrangeTee reported.
Project launches in the next two months include Blossoms by the Park, Tembusu Grand, The Continuum and The Reserve Residences.
There may be pent-up demand for the larger projects in the Katong area, such as Tembusu Grand and The Continuum, given that there have been few major launches there; the last comparable launch there was in 2004, Lee noted.
Lee also predicts Blossoms by the Park and The Reserve Residences to sell more than half their units on launch day, because private homes in the one-north area tend to enjoy strong demand and yield good rents. These two developments are near MRT stations and primary schools.
Huttons maintains its sales forecast for 2023 at around 9,000 units, with prices rising by up to 5 per cent.
Although the fallout of SVB is not expected to have a material impact on the property market following quick action by the US government, property purchases might get a boost if the Federal Reserve slows down or stops its interest rate hikes. That would translate to a better interest rate for local borrowers, Lee said.
Source: https://www.businesstimes.com.sg/property/new-private-residential-units-sold-february-99-january-still-down-203-year-year