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

SINGAPORE – Private homes in the prime district have been snapped up faster than those in the city fringe and suburbs in 2023, due in part to a lack of new private residential launches in that region.

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

In comparison, there were 2,747 new private homes sold in the city fringe, with 4,183 units launched. In the suburbs, developers launched 1,803 new homes and sold 1,230 units.

Overall, demand has slowed in 2023, which is expected to record the lowest yearly new home sales since 2008, when 4,264 units were sold.

Analysts attributed the slump to factors such as high interest rates and another round of property cooling measures in April.

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

As at Nov 26, 2023, developers have sold about 6,290 new units. PropNex expects 6,500 to 7,000 new homes to be transacted in 2023.

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said the stronger demand for new homes in the prime district could be due to the narrowing price gap of new launches between the CCR and other market regions.

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

According to URA data, the median prices of new private homes in the prime district rose 18.9 per cent – from $2,496 per sq ft (psf) to $2,968 psf – from 2020 to the first 11 months of 2023, she said.

Over the same period, median prices of new private homes in the city fringe rose 38.4 per cent, from $1,814 psf to $2,510 psf, while median prices for suburban homes rose from $1,548 psf to $2,113 psf.

Ms Sun also pointed out that the prime district had fewer new launches over the past two years than the city fringe and suburbs, which could have contributed to the higher sales rate.

Mr Marcus Chu, chief executive of ERA Singapore, said homes in the prime district are coveted by high-net-worth individuals for the purpose of wealth preservation as these units are expected to maintain their value better over the longer term. The scarcity of larger units also adds to their appeal.

In 2024, more than 30 projects that will yield over 10,000 non-landed private homes are expected to hit the market, said Ms Wong.

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