Huttons’ comments on URA 2Q 2023 numbers

28 July 2023

The private residential property market posted a decline of 0.2% in prices after the cooling measures on Apr 27. This could be due to developers pricing their launches sensitively with affordability in mind after the cooling measures. The median price per sq ft of new launches in 2Q 2023 was slightly lower than 1Q 2023. There were slightly lesser high-profile deals above $10 million after the cooling measures.

The Rest of Central Region (RCR) had the largest price decline of 2.5% while the Core Central Region (CCR) inched down by 0.1% and the Outside Central Region (OCR) increased by 1.2%.

Developer sales
Nevertheless market demand remains healthy as there is ample liquidity. Developers sold 2,127 units in 2Q 2023, almost 70% higher than 1Q 2023’s sales of 1,256 units. This brings the sales in 1H 2023 to 3,383 units.

The strong sales came on the back of more units launched for sale in 2Q 2023. 2,374 units from 5 projects were launched for sale. 4 of the 5 projects were launched after the cooling measures.

Tembusu Grand, which was launched before the cooling measures, achieved a strong first day sales above 50% or 340 units out of 638 units. The first launch after the cooling measures, Blossoms by the Park got off to a roaring start selling more than 200 units out of 275 units. The Continuum, a freehold project along Thiam Siew Avenue sold 216 units on the first day in May. The only integrated transport hub project in Bukit Timah, The Reserve Residences sold 520 units on its May launch weekend, making it the highest first-weekend sales since Normanton Park in Jan 2021. Lavender Residence, a boutique 17-unit project along Lavender Street sold 8 units in June.

Table 1: Top Ten Bestselling Projects in 2Q 2023

Project Region Units sold Median Price
The Reserve Residences RCR 593 $2,473 psf
Tembusu Grand RCR 362 $2,462 psf
The Continuum RCR 228 $2,721 psf
Blossoms By The Park RCR 214 $2,433 psf
The Atelier CCR 74 $2,662 psf
Leedon Green CCR 45 $2,869 psf
The Landmark RCR 45 $2,674 psf
Pullman Residences Newton CCR 38 $3,216 psf
Piccadilly Grand RCR 37 $2,069 psf
Hyll on Holland CCR 32 $2,893 psf
The Botany at Dairy Farm OCR 31 $2,094 psf

Source: URA, Huttons Data Analytics as of 28 Jul 2023

Figure 1: Developer’s New Sales Volume

Source: URA monthly developer sales, Huttons Data Analytics as of 28 Jul 2023

Resale Market
The decline in fixed rate loans for completed properties since May 2023 gave the resale market a boost in 2Q 2023. The overall transaction volume of 2,976 units in 2Q 2023 was 13.5% higher than 1Q 2023 while median prices edged up 1.8% quarter-on-quarter to $1,575 psf. In 1H 2023, resale prices are estimated to have risen by 6.1%.

Figure 2: Resale Volume and Prices

Source: URA, Huttons Data Analytics as of 28 Jul 2023

Interestingly the number of sub sales has increased recently. This could be due to more completions of homes in the RCR and OCR in the past one year. There is an increasing portion of buyers who prefer new projects that have yet to achieve its Certificate of Statutory Completion (CSC). They are opting for these units to save on renovation costs which can be substantial in older resale units. There is also a significant price gap of 20% to 30% between a new sale and sub sale unit which is drawing more buyers to this segment of the market.

Table 2: Breakdown of Private Residential Sales

Type of Sale 2020 2021 2022 1Q 2023 2Q 2023 1H 2023
New Sale 9,982 13,027 7,099 1,256 2,127 3,383
Resale 10,729 19,962 14,026 2,622 2,976 5,598
Sub Sale 198 568 765 243 285 528
Total 20,909 33,557 21,890 4,121 5,388 9,509

Source: URA, Huttons Data Analytics as of 28 Jul 2023

There were 4,401 private residential units completed in 2Q 2023, 48.4% higher than 1Q 2023. Coupled with the quiet job market, gains in private property rents eased for three quarters in a row to 2.8% in 2Q 2023. This is the slowest quarter growth in rents since 4Q 2021 and all segments of the residential market saw significantly lower increase in rents.

Buyer’s Profile
Following the cooling measures, the number of non-landed residential home purchased by foreigners reduced significantly in June. Based on caveats, there are 27 purchases by foreigners in June which translate to an estimated 2.5% of total non-landed transactions. This is a significant drop compared to 112 in April 2023 and 66 in May 2023. Of the 27 purchases by foreigners in June, 12 are from the USA, 8 unspecified, 2 from China and Switzerland, 1 each from India, Norway and UK. Of the 5 countries which are given the same tax treatment as Singaporeans, the USA has always been among the top purchasers of residential properties in Singapore. Hence it is not surprising that they have dislodged the Chinese from the No.1 position.

One US national bought a $45 million 8,633 sq ft unit in Les Maisons Nassim in May 2023.

36.5% of the transactions in 2Q 2023 are priced below $1.5 million, 29.2% are between $1.5 million to $2 million and 34.3% above $2 million. Almost 80% of purchases are by Singaporeans with PRs and foreigners making up 15.9% and 4.1%, respectively, in 2Q 2023.

Table 3: Comparison of Price Range and Residential Status (All Sale Types) in 2Q 2023

<$1.5 million $1.5 to <$2 million $2 to <$5 million >$5 million Total
Companies 0 1 3 1 5
Foreigners 32 25 99 49 205
Permanent Residents 383 170 204 27 784
Singaporeans 1,390 1,250 1,283 28 3,951
Total 1,805 1,446 1,589 105 4,945

Source: URA, Huttons Data Analytics as of 28 Jul 2023

Figure 3: Comparison of Nationalities among Buyers (All Sale Types)

Source: URA, Huttons Data Analytics as of 28 Jul 2023

Executive Condominiums
57 uncompleted executive condominium (EC) units were sold in 2Q 2023 as buyers went for more affordable alternatives to upgrade their lifestyle. As of 2Q 2023, 370 launched EC units remain unsold in the market.

Market Outlook
Based on advance estimates, Singapore’s economy grew by 0.7% on a year-on-year (YoY) basis in 2Q 2023, faster than the previous quarter 0.4% YoY growth.

There will be a flurry of project launches in July and the first half of August as developers avoid the lunar seventh month which begins on Aug 16 and ends on Sept 14.

Four projects, Grand Dunman, Lentor Hills Residences, Pinetree Hill and The Myst, have already been launched for sale in July. These 4 projects have collectively sold more than 1,100 units on their launch weekend.

The strong sales at these 4 projects have boosted the confidence of buyers looking into buying a private residential unit whether it’s for investment or own stay as the take up across various unit types and sizes at all 4 projects are very strong and healthy.

Upcoming launches in the first half of Aug include Altura (EC), Orchard Sophia, The Arden, The Lakegarden Residences and TMW Maxwell.

Altura, along Bukit Batok West Avenue 8 is the first EC in Bukit Batok in 22 years. With a very low level of unsold EC units and potential pent-up demand in Bukit Batok, this EC project should do well.

Orchard Sophia will be the first CCR launch in 2023. It is a freehold project in the private Sophia Road residential enclave in District 9 and is within walking distance to Dhoby Ghaut MRT interchange.

The Arden is possibly the most attractively priced new launch in 2023 and should see healthy interest. It is the only project launch in Choa Chu Kang in 2023.

The Lakegarden Residences will be the first private residential launch besides Jurong Lake in 7 years and buyers will enjoy a national garden right at their doorstep.

TMW Maxwell will be the first RCR launch next to the CBD in 2023. TMW Maxwell is a few minutes’ walk to Maxwell and Tanjong Pagar MRT stations.

Moving forward, the proportion of purchases by foreigners may be around 2% while that by PRs may increase to as high as 20% due to the cooling measures.

With more launches in 2H 2023, developers are estimated to sell around 8,000 units with prices increasing up to 5% in 2023 due to higher construction costs and interest rates. There may be more completion of non-landed homes in 2H 2023 which may stabilise resale prices to around 8% in 2023. The high interest rate might put a cap on resale transaction volume to an estimated 11,000 units in 2023.