New launches in 2Q2022 break private residential market out of stalemate
New launches in 2Q2022 break private residential market out of stalemate.
New launches, according to a Knight Frank report, fueled a surge in private home transactions in Singapore in 2Q2022. In 2Q2022, non-landed private home sales excluding executive condominiums (ECs) totaled 5,844 units, a 25.9 percent increase year on year.
New sales increased 43.1 percent year on year to 2,383 units in 2Q2022, following a 42.6 percent year on year drop in 1Q2022. After falling for two consecutive quarters, resale transaction volumes increased in 2Q2022, with 3,461 units transacted, a 16.3 percent increase year on year. According to Knight Frank, the increased sales volume represents a resumption of market activity following a “state of pause” caused by property cooling measures that went into effect in December. In 2Q2022, four new developments were launched, excluding ECs, adding 760 new units to the market. In comparison, only 48 units were introduced in the previous quarter.
According to URA flash estimates released on July 1, prices for non-landed private homes have also begun to rise, with a 3.3 percent increase year on year. This is a rebound from the 0.3 percent q-o-q decline in 1Q2022. Prices for non-landed private homes increased the most in the Rest of Central Region (RCR), rising 6% year on year in 2Q2022 after falling 2.7 percent the previous quarter. New launches such as the 407-unit Piccadilly Grand and the 298-unit [email protected] aided price increases. The two projects accounted for 42.6 percent of the RCR’s new unit sales of 1,305.
As a result of the new launches, new units sold in the RCR increased 60.7 percent year on year in 2Q2022, while average new sale prices increased by 8.5 percent year on year to $2,305 psf. Prices of non-landed private homes in the Core Central Region (CCR) increased 1.6 percent year on year in 2Q2022, reversing a 0.1 percent decline in 1Q2022. Knight Frank attributes the rebound to the opening of air travel lanes in April, which allowed foreign buyers to purchase Singapore real estate. Despite a lack of new launches, new non-landed residential transactions in the CCR increased by 73.8 percent year on year to 596 in 2Q2022, contributing to a 49.5 percent year on year increase in total non-landed transactions in the CCR.
Meanwhile, non-landed home prices in the Outside Central Region (OCR) increased by 1.7 percent year on year in the second quarter of 2022, down from 1.9 percent in the previous quarter. In 2Q2022, 482 new units and 1,774 resale units were sold, representing a 5.5 percent year on year decrease and a 5.7 percent year on year increase, respectively.
In the coming months, Knight Frank anticipates a slowing in market activity due to rising interest rates, which may impact home-buyer affordability. Nonetheless, demand continues to outnumber supply, which bodes well for developers. “Buyers have shown an unexpected resilience,” says Nicholas Keong, head of private office at Knight Frank Singapore. “This will now embolden developers to launch projects to tap this buyer demand before interest rates rise further.” Overall, Knight Frank expects private residential prices to rise by 5% to 7% in 2022, compared to the initial conservative forecast of 1% to 3% growth when the cooling measures were first announced in December 2021.
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