Cooling measures hit China homebuyers’ sentiment

It will take two years before China’s homebuying sentiment returns to normal.

China recently eased its border restrictions but the surge in buying of homes in Singapore will not be high, Huttons Asia said.

It added that it would take up to two years after the cooling measure before Chinese foreigners’ cautious buying sentiment would end.

“Buying sentiments are expected to remain cautious. Economic uncertainties and the prohibitive 30% ABSD will likely cap demand from foreigners,” said Huttons Asia.

Slowest month

According to government data, home developers' sales in December 2022 is the “slowest month.” Only 170 units were sold, which is 34.6% down month-on-month and 73.7% lower year-on-year.

There were also only 45 units for December, the lowest number of units launched since the Urban Redevelopment Authority reported the data in June 2007, Huttons Asia said.

OrangeTee attributed the drop of private homes sales due to the holidays and developers became cautious about launches.

“Only one new launch, Tenet at Tampines St 62, occurred last month and it garnered strong buying interest, with 73% of the entire project being sold at a median price of S$1,381 psf,” OrangeTee said.

Despite the decline in new home sales, executive condominiums posted an increase with 468 units sold in December from 186 units sold in the month before, One Global Group said.

Projects

Upcoming launches during the Chinese New Year period include Gems Ville, The Botany at Dairy Farm, and Terra Hill, Huttons said. 

These projects are located in areas with limited new home supply, with previous nearby launches such as Zyanya and Dairy Farm Residences already being over 60% and fully sold respectively. The Botany at Dairy Farm and Terra Hill are expected to also see strong demand.

Additional projects that may launch in the first quarter of 2023 include 8 Shenton Way, Blossoms by the Park, Tembusu Grand, Lentor Hill Residences, Marina View, Newport Residences, Terra Hill, The Continuum, The Hill@One-North and The Reserve Residences, Huttons also said.

OrangeTee sees that, in 2023, over 11,000 new homes from more than 45 projects will be launched for sale, including large projects such as The Reserve Residences and Tembusu Grand. Prices are expected to climb at a slower pace of around 5%-8% this year.