CBRE's Commentary on Monthly New Home Sales - April 2023

By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

New home sales accelerated for the fourth straight month in April 2023, on the back of attractive new city fringe launches – Tembusu Grand (55% sold) and Blossoms by the Park (75% sold). Developers launched 779 new units in April 2023, a 36.0% m-o-m increase from 573 units in March 2023. 

New developer sales (excluding ECs) in April 2023 rose 80.3% m-o-m to 887 units from March 2023’s 492 units and 34.2% y-o-y from April 2022’s 661 units. This brings 2023 year-to-April new home sales to 2,143 units, a 13.8% y-o-y fall from 2,486 units sold over the correspondingly period in 2022 on weaker sales in the first three months.

While the top-selling projects were new projects in the RCR, we note that some projects in the CCR have moved more units as they dangled more discounts post the 27 April cooling measures. In particular, The Atelier, near Newton, sold 46 units or 38% of its total 120 units in April alone at a median price of S$2,658psf, 8.8% lower than the median price of S$2,916psf when it first launched and sold four units in March 2021. 

Top 10 Selling Projects in December 2022 (including ECs and landed)

Source: CBRE Research, URA

April 2023 saw two new launches from the RCR, Tembusu Grand (638 units) and Blossoms by the Park (275 units). Both projects were met with steady demand and set new benchmark prices in their respective locales. 

The top performing project in the month was new launch Tembusu Grand. Jointly developed by CDL and MCL Land, the development was met with healthy demand, moving 354 of its 638 total units (55%) at a median price of $2,463 psf. The project benefited from pent up demand in the area – the popular Katong enclave – which has not seen a project of comparable size since Haig Court in 2004. Located near the upcoming Tanjong Katong MRT, the project has a host of amenities within its surroundings, is in close proximity to popular schools and offers good connectivity to the CBD and Singapore Sports Hub. 

Following close behind was new city fringe launch, Blossoms by the Park. Despite launching on 29 April 2023, two days after the increased ABSD under April 2023’s round of cooling measures took effect, the project developed by EL Development saw robust take-up, moving 205 of its 275 total units (75%) at a median price of $2,427 psf. In terms of the proportion of total units sold, it is the top performing RCR project in 2023 so far. Besides its smaller scale, the project also benefitted from its relatively attractive price point and pent-up demand catchment of professionals working in the one-north precinct, Singapore’s R&D and biomedical science hub.

The next two best performing projects in the month were CCR project, The Atelier which sold 46 units at a median price of $2,658 psf and RCR project The Landmark which moved 20 units at a median price of $2,689 psf. 

New launches in April 2023

Source: CBRE Research, URA

New Home Sales (excl. ECs) by quantum

Source: CBRE Research, URA

*Based on Realis new sales (excl. EC) caveats extracted on 15 May 2023.

Based on quantum size, the largest proportion of new private homes sold (excl. ECs) were in the S$1.50 mil - S$2.00 mil range at 37.0%. This was followed by the S$2.00 mil – S$2.50 mil bracket at 21.5%. 

By market segment, April 2023’s developer sales (excluding ECs) were skewed towards the Rest of Central Region (RCR) where 628 units (70.8%) were sold, followed by the Core Central Region (CCR) where 208 units (23.4%) were sold and the Outside Central Region (OCR) which saw the sale of 51 units (5.7%). This compares to 40.0% in the CCR, 13.2% in the RCR and 46.7% in the OCR in March 2023. 

On 26 April 2023, the Singapore government introduced a new set of cooling measures which included 3 to 30 percentage point upward revisions in ABSD rates. The steepest increase was targeted at foreigners, with ABSD rates doubling from 30% to 60%. The new measures took effect from 27 April 2023.

2023 year-to-April new home sales currently stands at 2,143 units, a 13.8% y-o-y fall from 2,486 units sold over the correspondingly period in 2022. Looking ahead, sales volumes in May 2023 is set to be underpinned by two major project launches, freehold launch The Continuum (816 units) and integrated development The Reserve Residences (732 units), which would feature access to a mall and Beauty World MRT. It was reported that the former project was met with moderate demand on its 6 – 7 May 2023 launch weekend despite cooling measures and the cloudy economic outlook, moving 216 or 27% of its 816 total units at an average price of $2,732 psf.

Other new launches expected in the pipeline include OCR project, Lentor Hills Residences (595 units) on Lentor Hills Parcel A GLS site which is also slated to launch in Q2 2023. 

Sentiment is mixed – on one hand, the downbeat macroeconomic conditions, cooling measures and elevated interest rates may deter some local and foreign investors. On the other, demand is still strong for realistically-priced projects with attractive locational attributes. All eyes will be on the upcoming RCR launch The Reserve Residences (732 units) which could ride on the continued interest for integrated developments with indicative prices starting from S$2,300psf. 

Overall, CBRE Research expects 6,500 – 7,500 new private homes to be sold in 2023, on par with the 7,099 units in 2022, which was a 14-year low since 2008’s 4,264 units. Stabilisation of interest rates should provide a clearer outlook in H2 2023 and bring back buyer confidence.

In view of the cooling measures effective 27 April 2023, CBRE Research believes home prices have peaked and are likely to flatten out in the next few quarters. Barring widespread retrenchments and a sustained recession, a significant price correction is not expected given low unsold inventory and generally healthy household balance sheets. As such, CBRE Research maintains its 2023 forecast for private home price growth of 3%, slower than the 8.6% seen in 2022 due mainly to a weaker economic outlook -- MTI forecasts 0.5 – 2.5% GDP growth for 2023, vs 3.6% for 2022.