New private home sales declined 58% month-on-month after December 16 cooling measure

With the introduction of cooling measures and social distancing restrictions on year-end festivities, December 2021’s developer sales (excluding Executive Condominiums, or ECs) declined 58% month-on-month to 650 units.

On a year-on-year basis, developer sales were also down 46.6%, which is about half of December 2020’s volume (1,217 units). At that time, sales were then boosted by key launches like Clavon and Ki Residences.

According to Ms Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE, it is estimated that 62% of new homes in December 2021 were transacted before the 16 December 2021 cooling measures announcement, while 38% took place after.

“Developer sales for the whole of 2021 now stand at 13,118 units, surpassing 2020’s full volume of 9,982 units, rounding off a bumper year. This would be the highest figure observed since 2013, where 14,948 new homes were sold,” she shared.

Top 10 Selling Projects in December 2021 (including ECs)

Source: CBRE Research, URA

In December 2021, a large portion of developer sales (87.1%) came from existing projects, due to the relatively small number of units launched from new projects.

Normanton Park was the best performing project in the month of December 2021, with 44 units sold between 1-15 December 2021, while 29 units were sold between 16-31 December.

In total, 73 units were sold at a median price of S$1,831 psf. Correspondingly, the mega project has now sold 80% of its total 1,862 units.

December also saw the launch of three new developments – Perfect Ten, Mori and Zyanya.

Mori, which launched in District 14 in the Rest of Central Region (RCR), was the second-best performing project in the month, moving 71 of its 137 (52%) total units at a median price of S$1,869 psf.

Sixty-eight units were sold before the measures were in place, while three units were sold thereafter. The project did well on its quantum of an average of S$1.34 mil per unit for its freehold status.

“The effects of the cooling measures may have been the most pronounced in the Perfect Ten project,” Song commented, “that was launched on 18 December 2021, a few days after the cooling measures were in effect.

“In the high-end segment, highly anticipated Core Central Region (CCR) project, Perfect Ten at prime Bukit Timah Road saw subdued interest, despite the developer offering a one-time discount of 5% to buyers, in view of the cooling measures. The project moved 11 units at a median price of S$3,222 psf.”

Zyanya, a 34-unit boutique project in Geylang, sold two units at a median price of S$1,899 psf.

Song shared that by market segment, December’s developer sales were skewed towards the RCR due to the decent showing at Mori and the sustained performance of Normanton Park.

292 units (44.9%) of the month’s sales came from the RCR, followed by the Outside Central Region (OCR) which sold 224 units (34.5%) and CCR which sold 134 units (20.6%). This compares to 58.8% in the RCR, 29.7% in the OCR and 11.5% in the CCR in November 2021.

“Looking ahead, new sales in January 2022 are expected to be more muted, as the market is likely to see a lull in launches and sales activity leading into the Lunar New Year holidays (February 1 and 2, 2022). As such, developers might choose to adopt a “wait-and-see” approach before taking any major actions on the back of the recent cooling measures.”

Launches in January 2022 could include strata-landed project, Belgravia Ace which is expected to see strong interest due to the limited supply of landed projects.

For the non-landed segment, Q1 2022 could see the launch of several small mass-market projects originally acquired through the private market, such as Kovan Jewel (34 units) and The Arden (105 units).

“Given the cooling measures, demand in the housing market would likely moderate in the first half of 2022, as buyers take a pause to re-evaluate their potential buying decisions.

“In view of the limited new launch pipeline in 2022, CBRE Research expects new home sales to trend down from 2021’s 13,000+ units to a normalised 9,000 – 10,000 units, while prices could be flat to up 3% in 2022, below MTI’s 2022 GDP forecast of 3 – 5%.

“Due to the larger impact of the cooling measures on investors and foreigners, volumes and prices in the CCR market should be more affected. Nonetheless, prices are unlikely to collapse due to the strong economic fundamentals, low unsold inventory (17,140 units as of Q3 2021) and delays in construction driving up occupancy and rents.”

URA will be releasing the full set of real estate statistics for Q4 2021 in an update on 28 January 2022 or earlier. It originally shared flash estimates on 3 January.

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If you found this article helpful, check out Monthly record of million-dollar flat transactions broken again in December 2021 and Property trends Singapore 2022: 5 market trend predictions.

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