New home sales unhindered by rising mortgage rates

Sales were bolstered by the successful launches of major mass-market project.

New home sales were barely affected by rising mortgage rates, with preliminary figures showing that 2,194 new homes were sold in the third quarter of 2022 similar to the 2,397 units sold in Q2 2022, a report by CBRE revealed.

Sales in the quarter were bolstered by successful launches of major mass-market projects like AMO Residence, Lentor Modern and Sky Eden@Bedok which saw brisk take-up despite record average prices for the OCR above the $2,000 psf threshold. 

Home prices continues rise

Meanwhile, private home prices continue to rise, registering a 3.4% QoQ growth in Q3 2022 from the 3.5% increase in Q2. 

This was led by new project launches in the suburbs (OCR) which set new benchmark prices as developers held firm on their asking prices amidst higher construction costs and low unsold inventory.

On the other hand, landed homes saw price growth moderate further to 1.2% QoQ in Q3 2022, from the 2.9% QoQ increase observed in Q2 2022, as the sellers and buyers’ price gap widened.

Private home rent rises

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Rental prices of private homes also saw an increase, breaking a new record high of 16.2% YoY in Q2 2022 after the reopening of Singapore’s borders.

Preliminary median psf rents for non-landed properties extended their rise in Q3 2022, buoyed by strong leasing demand from expatriates and Singaporeans waiting for their new homes to be ready amid delayed construction. This upward rental trend is likely to sustain until a more significant supply is completed in 2023.

“The sharp acceleration in suburban home price growth contributed to a fresh round of cooling measures. From 30 Sep 2022, interest rate floors in TDSR and MSR were raised, and a new 15-month wait-out period is imposed on downgraders from private homes to resale public housing,” CBRE said.

“With this, CBRE Research expects the mass market segment to cool and 2022 full-year new home sales to be 8,000 units, a 39% decline from 2021’s 13,027 units. Prices could stabilise in Q4 2022, bringing 2022 full-year price growth to 8%, a moderation from the 10.6% increase in 2021.”