SINGAPORE: New launch Terra Hill in Pasir Panjang and a healthy take-up of prime district private homes helped shore up developers’ sales in February.

But buyers remained, for the most part, wary in the face of rising interest rates, tighter loan conditions, higher taxes and a slowing economy.

New private home sales, excluding executive condominiums (ECs), edged up 9.9% to 432 units in February, from 393 units in December.

This was due in part to Terra Hill, which moved 97 of its 270 total units, or 36%, at a median price of US$2,699 (RM12,145) per sq ft. There was one other new freehold launch, the 24-unit Gems Ville in Geylang.

Tricia Song, head of research in South-East Asia at CBRE, noted that the increase in the marginal buyer’s stamp duty for pricier residential properties from Feb 15 onwards did not dampen demand.

URA Realis caveats showed that a larger number of homes valued at US$1.5mil (RM6.75mil) and above were sold in the second half of the month than in the first.

But Song said the overall take-up in February was dampened by slowing economic conditions, higher mortgage rates and more stringent financing.

Year-on-year, sales fell 20% from 542 units in February 2022, according to data released by the Urban Redevelopment Authority on Wednesday.

With ECs included, February’s sales fell 14.9% to 470 units, from 552 in January, and down 18.1% from 574 a year ago.

This could also be due to buyers holding off in anticipation of upcoming project launches, while others are watching if recent bank failures in the United States will stay the Federal Reserve’s hand from further rate hikes in 2023, PropNex’s head of research and content Wong Siew Ying said.

In February, 401 condo units (excluding ECs) were launched for sale, compared with 410 in January. The number of units launched soared 105.6% from 195 a year ago.

Pricier units accounted for a larger proportion of all non-landed new home sales in February, with more new homes transacted in the prime district and city fringe, combined with the tight supply of unsold new homes, real estate firm JLL said.

The prime district accounted for 51.4%, or 222 units, of all new home sales, despite no new projects launched in this submarket in February. Top condo sellers included Pullman Residences Newton, Leedon Green, Perfect Ten, One Bernam and Klimt Cairnhill.

Marcus Chu, chief executive of ERA Realty Network, said some buyers were attracted to nearly completed prime district condo projects such as Haus on Handy, Kopar at Newton and Wilshire Residences, for which they can soon collect their keys, while others were looking to own a home, given the sharp spike in private residential rental rates.

Sales in the city fringe more than tripled from January with 163 units sold in February, mainly from Terra Hill, which accounted for nearly 60% of all units sold in this submarket, JLL said.

New home transactions in the suburbs, however, plunged 74.7% to just 47 in February, due to a lack of new launches and growing affordability concerns after new suburban condo prices escalated to more than US$2,000 (RM9,000) per sq ft in the past year, analysts said.

Lam Chern Woon, head of research and consulting at Edmund Tie, said buyers are likely to remain price-sensitive, especially towards projects in the city fringe and suburban areas, as financing costs remain high. But the price upside for new upcoming launches, except for those with outstanding locations and design, is likely to be capped by economic uncertainty, he added.

CBRE noted that new home sales in March should be supported by new suburban condo launch

The Botany at Dairy Farm. The 386-unit project moved 48%, or 187 units, at an average price of US$2,070 (RM9,315) per sq ft, it said, citing reports. — The Straits Times/ANN