Singapore New Home Sales rise 14% in March despite increase in supply of New Launches

Near sell-out Achieved

The Singapore private home market is seeing a resurgence in demand, with new home sales hitting a six-month high in March. According to data from the Urban Redevelopment Authority (URA), developers sold 492 private homes in March, a 13.6 percent increase from February. This increase was largely driven by the strong sales performance of The Botany at Dairy Farm, a suburban project by local private builder Sim Lian Group, which sold nearly half of its 386 condos on opening day. The suburbs, also known as the Outside Central Region in Singapore, accounted for 47 percent of the homes sold in March, followed by the Core Central Region, a proxy for luxury homebuyers, with 40 percent of total March sales.

Despite market uncertainties, including concerns over rising interest rates and a potential economic slowdown, developers have continued to launch new projects. Analysts expect that sales will pick up further in the coming months, with at least one more project set to launch in April and four more in May. However, this surge in supply could potentially dampen home price growth.

"The sales performance at recent new launches should help to put wind in developers’ sails," said Siew Ying Wong, research and content head at PropNex Realty. "We believe the positive sales outcomes reflect the resilient underlying demand for new private homes and the still ample liquidity in the market."

Overall, buyers picked up 1,318 new private homes in the first quarter of 2023, nearly double the 690 transacted in the preceding three months. However, this is still down 27.8 percent compared to the 1,825 sales from January through March 2022.

Growth Likely to Slow Down

Despite the influx of new supply, home price growth is expected to continue rising, albeit at a softer pace of 6 to 8 percent, compared to the 8.6 percent growth logged in 2022. During the first quarter, new home prices rose by 3.2 percent, accelerating from the 0.4 percent uptick in the preceding quarter. This suggests that there is still underlying demand for new private homes in Singapore, but buyers are becoming more price-sensitive as market uncertainties persist.

During the first quarter, new home prices rose by 3.2%, accelerating from the 0.4 percent uptick in the preceding three months, based on preliminary URA data released earlier this month. January through March marked the 12th straight quarter of rising home prices in Singapore, with rates now up by 27.9 percent from 2020.

Chern Woon Lam, research and consulting head at Edmund Tie, said the first quarter market data attests to the robust demand for new homes in Singapore but cautioned that heightened market uncertainties and the volume of new projects slated to launch in the coming months may temper growth.

Overall, though buyers remain active in the market, with the plentiful new projects slated for launch this year, buyers can afford to wait for the right product and location that best suits their needs and budget.