New private home sales remained strong in prime district amid slowing demand in 2023

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SINGAPORE – Private residences in the prime district have been snapped up quicker than those in the suburbs and city fringe in 2023, due in portion to a shortage of new private housing launches in that area.

From January to September 2023, there were 505 private residential units launched for sale in the core central region (CCR), yet 1,182 new homes were sold, according to data from the Urban Redevelopment Authority (URA). Housing units from new projects already launched accounted for the additional homes transacted.

In contrast, there were 2,747 new private residences sold in the rest of core region (RCR), with 4,183 units launched. In the suburbs, developers launched 1,803 new abodes and sold only 1,230 units.

Overall, demand has declined in 2023, which is predicted to record the lowest annual new residence sales since 2008, when 4,264 units were transacted.

Analysts attributed the decline to factors like high interest rates and new property cooling measures which came into effect from April 2023.

PropNex’s head of research and content, Ms Wong Siew Ying, commented that she expects overall new private residential sales, excluding executive condominiums, to underperform the 7,099 units transacted in 2022, which was then already a 14-year low after 2008.

As at 26 November 2023, property developers have sold around 6,290 new units. PropNex predicts 6,500 to 7,000 new homes to be transacted in 2023.

Senior vice-president of research and analytics at OrangeTee & Tie, Ms Christine Sun, mentioned that the stronger demand for new abodes in the CCR could be because of the narrowing price difference between new launches in the CCR and other market sectors.

The rates of new private homes in the city fringe and suburbs have been increasing at a faster pace than those in the prime district, Ms Sun noted.

Ms Sun pointed out that the CCR had lesser new launches over the past 2 years than the suburbs and city fringe, which could have added to the higher sales rate.

Chief executive of ERA Singapore, Mr Marcus Chu, commented that homes in the CCR are coveted by high-net-worth individuals for the purpose of preserving wealth, as these properties are expected to retain their value better over the longer run. The scarcity of bigger units also adds to their appeal.

In 2024, over 30 new projects that will yield more than 10,000 non-landed private housing are predicted to hit the market, informed Ms Wong. Lentor Mansion is one of them.

Some of the new launches to keep an eye out for in the CCR include Marina View Residences, Skywaters Residences, One Leonie Residences and Newport Residences.

Both Ms Wong and Ms Sun expect overall private home rates to remain relatively stable in 2024.

Mr Chu mentioned that analysts stay hopeful that interest rate cuts could manifest in the second half of 2024. Lower interest rates can provide an extra boost to the new launch market, he added.


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