The Reserve Residences was the best-selling private residential project in May (Picture: Samuel Isaac Chua/The Edge Singapore)SINGAPORE (EDGEPROP) - Developers sold 1,038 new homes excluding executive condominiums (ECs) in May, 17% higher than the 887 units sold the month before, based on data released by URA on June 15. This brings new private home sales to 3,181 units for the first five months of the year.The May figure represents the highest new private home sales achieved since May 2022, whe
New private home sales in May were broadly underpinned by local demand, with Singaporean citizens and permanent residents making up 85.5% and 11.1% of transactions respectively. Chia Siew Chuin, head of residential research, research and consultancy at JLL, notes that demand from these two groups of buyers remains robust despite cooling measures, higher home prices and elevated interest rates.
In contrast, the proportion of new private homes purchased by foreigners dipped noticeably. In May, foreigners purchased 36 new non-landed private homes last month, making up 3.5% of non-landed new private home sales, compared to 8% recorded in April. PropNex's Wong notes that this is the lowest proportion chalked up by foreign buyers since December 2021.
Eugene Lim, key executive officer at ERA Realty Network concurs. “The CCR and RCR market, which used to see greater interest from foreign buyers, saw a discernible decrease in the number of foreign buyer transactions. The total number of units bought by foreigners declined from 38 to 21 units in CCR, and from 27 to 13 units in RCR,” he adds. At The Continuum and The Reserve Residences, the projects saw only three and five units respectively purchased by foreigners.
Lee Sze Teck, senior director of research at Huttons Asia, believes that the proportion of purchases by foreigners could further decline in the coming months. “There was a transition period in May that allowed options to purchase properties that were exercised on or before May 17 to be subject to the previous ABSD rate of 30%. Hence, the full effect of the cooling measure will be evident in June,” he explains.
Leonard Tay, head of research at Knight Frank Singapore, expects local demand to continue underpinning new private home demand throughout 2023 as the upcoming projects are launched. “Demand for new product will continue to be firm…so long as the price points are within the affordability levels of this type of buyer,” he opines.
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