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Demand for new private homes in prime districts slowed, although sales remained strong

Singapore: In 2023, private residences in the prime district near Grand Dunman have been acquired more quickly than those in the suburbs and city periphery, partly because there haven’t been many new private residential launches in that area.

According to data from the Urban Redevelopment Authority (URA), from January to September 2023, 505 private residences were launched in the core center region (CCR), but 1,182 new dwellings were sold. The extra homes sold were new construction projects like the Grand Dunman Floor Plan already underway.

Comparatively, out of 4,183 units released, 2,747 new private dwellings were sold at the city’s periphery at higher prices. Developers launched 1,803 new homes in the suburbs, of which 1,230 were sold.

Demand has generally decreased in 2023, and sales of new homes are predicted to be at their lowest level since 4,264 units were sold in that year.

Experts blamed the downturn on things like high loan rates and fresh property cooling measures in April.

PropNex’s head of research and content, Ms. Wong Siew Ying, stated that she anticipates new private home sales in general to underperform the 7,099 units sold in 2022—a record low since 2008—apart from executive condominiums.

The increased demand for new homes in the premier district, according to Ms. Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, may be caused by the closing price difference between new releases in the CCR and other market zones.

According to Ms. Sun, the cost of new private residences in the outskirts of the city and suburbs has been increasing more quickly than that of properties in the desirable area.

The median price of new private dwellings in the prime district increased by 18.9%, from $2,496 per square foot (psf) to $2,968 psf, between 2020 and the first 11 months of 2023, according to URA data, she said.

While median prices for suburban homes increased from $1,548 psf to $2,113 psf during the same period, new private home prices in the city perimeter increased by 38.4%, from $1,814 psf to $2,510 psf.

Ms. Sun further emphasized that the suburbs and city edge had more new releases in the last two years than the core center, which may have contributed to the higher sales rate.

High net worth individuals seek residences in the prime district as a means of preserving their wealth, according to Mr. Marcus Chu, chief executive of ERA Singapore, because these properties are anticipated to hold their value better over an extended period of time. Larger units are rarer, which increases their allure.

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.

The Cairnhill, Marina View Residences, Skywaters Residences, Newport Residences, 21 Anderson, and One Leonie Residences are a few of the recently completed projects in the desirable neighborhood to keep an eye out for.

In general, Ms. Sun and Ms. Wong anticipate that private property prices will not significantly change in 2024.

According to Ms. Sun, the increased supply of condominiums in 2023 has contributed to price stabilization, and given property curbs and purchasers being cautious owing to cost concerns, the market is anticipated to remain stable.

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