New private home sales in October 2022 plummeted to a two-year low, breaking the upward momentum from September’s sales. A total of 312 new private homes (excluding executive condos) were sold, making it the lowest sales volume in a month since April 2020. The slow pace of sales comes amidst ongoing property cooling measures in Singapore as well as a low supply of new homes in the private property sector.
October’s sales marked a 68.4% drop compared to September’s 987 new home sales, translating to a 65.8% year-on-year decrease. Counting in the executive condos (ECs), October saw 810 units being sold, an 18.3% drop from September and a 22.7% drop from October last year.
The top performer in private home sales, excluding ECs, was the Core Central Region (CCR), taking up 55% of the sales numbers in October at 171 units sold. The Rest of the Central Region (RCR) followed with 81 transactions, which was a 21% month-on-month decline. The worst-hit submarket were homes in the OCR, which saw new sales crashing down by 91% month-on-month to just 60 transactions in October. The bulk of private home sales in October, in fact, came from the EC segment, which recorded 498 sales, with 96% of that coming from Copen Grand in the new town Tengah.
Why private home sales have slowed down
Overall, we see private home sales being slow in October, with the exception of the EC segment. The uncertainties brought about by the latest property cooling measures, as well as the dearth of private home supply, are the two biggest factors for this trend.
Many buyers are adopting a ‘wait and see’ approach as they re-evaluate their finances and re-consider their home-buying plans. Rising interest rates are also contributing to this cautious approach, which has, in turn, brought about slowing sales.
For those who still want to buy a home, their choices have been limited. New launches of private homes (excluding ECs) were at a four-year low in October, which meant only 102 new homes were up for sale. This is a stark decline from 913 units available in September. Of the two private home launches that month – Pollen Collection on Nim Road and Enchante on Evelyn Road – both put up only a handful of units and sold 2 units each.
While there may be limited numbers of unsold stock, these are likely to be higher-priced units which are different from what most buyers are looking for right now. This may also be why Copen Grand saw such a huge success, as HDB upgraders look for more affordable options rather than higher-priced units in the CCR. From the strong performance of EC sales, especially at Copen Grand, we can see that there is still strong demand for new homes – as long as the supply can match up to it.
Outlook for private home sales in the rest of 2022
For the remaining two months of 2022, property analysts predict the slow pace of sales to continue. Except for Tenet EC in Tampines planned for December, no more major launches are slated for the rest of the year. Traditionally, the year-end festive period is also a slow one for the property market.
Not to mention, the effects of cooling measures and rising home loan rates will continue to leave buyers uncertain and cautious in their approach. As a result, the forecast for total private home sales in 2022 is likely to be capped at 7,500 units, with home prices climbing by 9% to 10%.
Potential homebuyers can keep their eyes peeled for Tenet EC in Tampines, which will start sales in December, and Sceneca Residence in Tanah Merah, expected to launch in January 2023. With more project launches expected after Chinese New Year in 2023, analysts predict an uptick in sales then, along with the recovery of the private property market.
Deciding whether it’s a good time to upgrade to a condominium or EC? If you are considering selling your HDB soon, it pays to be cautious and consult a HDB property agent in Singapore for expert advice.
Joel Choy is an expert in that – not just HDBs but also in helping his clients buy and sell their private properties. As a top-ranking housing agent in Singapore, Joel Choy uses proven strategies to clinch sales at the best price possible. Tap into his expertise by scheduling your free consultation with him today!