New private home sales more than double in September, driven by Lentor Modern, SkyEden@Bedok launches

SINGAPORE — New private home sales in Singapore more than doubled in September from a month earlier, driven by the launches of Lentor Modern and Sky Eden@Bedok.

Excluding executive condominiums (ECs), developers sold 987 units last month, up from the revised 438 units in August, according to figures released on Monday (Oct 17) by the Urban Redevelopment Authority (URA).

This is the highest number of sales since May, when developers sold 1,355 units excluding ECs.

Ms Christine Sun, OrangeTee and Tie's senior vice president of research and analytics, said: "New home sales in September climbed to the second-highest level this year on pent-up demand for suburban homes."

On a year-on-year basis, home sales in September rose 18.3 per cent from the 834 units sold in the same month last year.

Sales in September were boosted by the launch of two suburban projects: Lentor Modern, which sold 512 units, and Sky Eden@Bedok, which sold 121 units.

Ms Sun called the sales figures at Lentor Modern and Sky Eden@Bedok "astounding".

"Although their median launch prices were above S$2,100 psf, both projects sold well, moving 84.6 per cent or 512 units at Lentor Modern and 76.6 per cent or 121 units at Sky Eden@Bedok within a month," she said.

"The sales performance of both projects was astounding, considering their price points, interest rate hikes and growing uncertainties on the macroeconomic front."

Ms Sun added that demand remains strong due to a lack of home supply in the suburbs and because Housing Board (HDB) upgraders who sold their flats in recent months need replacement homes.

Huttons Asia's senior director for research Lee Sze Teck said that the number of units launched in September jumped 6.8 times compared to the 134 units launched in August.

"Despite the higher volume of units launched for sale, monthly sales have once again exceeded the launch units, reflecting the strong demand for private homes," Mr Lee said.

"This is the 13th month that sales have exceeded units launched for sale."

The Outside Central Region (OCR) saw the most number of units sold at 686, followed by the Core Central Region (CCR) at 198 units and the Rest of Central Region (RCR) at 103 units.

Mr Mohan Sandrasegeran, senior analyst for research and content creation at One Global Property Services, noted the surge in OCR sales compared to last month's figures.

"Among all the market segments, OCR had the highest growth in the number of new home sales in September. The number of units sold in OCR increased from a mere 90 units in August to an astounding 686 units in September," he said.

"There have been few significant new non-landed condo launches in the OCR segment aside from Amo Residence in July. As a result, interest from pent-up demand fuelled longing buyers and investors who were probably chomping at the bit."

Mr Mohan added that buyers and investors are "starting to embrace the new benchmark price points since the availability of new launches in OCR has been dwindling".

"They are becoming acclimatised to the fact that projects in the OCR would typically have a price point of S$2,000 per square foot or more moving forward," he said.

The proportion of purchases made by foreigners dipped to 4.8 per cent in September, compared to 12.7 per cent a month earlier, according to URA and Huttons Research.

"As almost 70 per cent of the sales in September were in the OCR, foreigners made up a smaller share of the overall sales," Mr Lee said.

LOOKING AHEAD

Moving forward, the introduction of property cooling measures could have a moderate impact on private home sales, said Ms Sun.

"New cooling measures were introduced on Sep 30, 2022. The calculation of the total debt servicing ratio was increased by 0.5 percentage points for property loans granted by private financial institutions," she said.

"While the change will reduce the loan quantum available to homebuyers, there could be a moderate impact on the private residential market.

"The revision was widely expected, and many borrowers were already exercising prudence as they knew that interest rates may continue to rise next year."

Depleting unsold inventory and a lack of major launches in October are also likely to cap sales at about 300 to 400 units, Mr Lee said.

However, Ms Sun noted that there could be strong demand for units at two EC projects that will be launched by the end of the year: Copen Grand in Tengah and Tenet in Tampines.

"Despite the cooling measures, demand for these ECs is expected to be robust owing to the limited supply of ECs in the market," she said.

"Currently, most EC projects have been fully sold except North Gaia, which was launched this year. As prices of new suburban condos continue to rise, we may expect more eligible buyers to turn to the EC market as these homes are still more affordable and value for money."

Two launches in the CCR in November — Hill House and Sophia Regency — could also boost sales, said Mr Lee.

"The quantum for these two projects is very attractive for those who desire to own a prime District 9 address," he said, adding that Kovan Jewel in the OCR may also be launched for sale in November.

The new 15-month waiting time for private residential property owners and former private residential property owners to purchase resale HDB flats may also affect the market, said Mr Mohan.

"Some private property owners who are looking to right size or downsize into the HDB resale market will now be starting behind the eight ball," he said.

"Hence, these private property owners who are unable to wait the 15-month period might consider smaller private resale condos instead.

"Alternatively, they might consider looking into the new launch market, especially developments that are about to hit their Temporary Occupation Permit (TOP) in the immediate future. Projects that are about to be completed might garner more interest from savvy buyers and investors as a form of likely alternative to those considering to right size or downsize as well." CNA