Cushman & Wakefield's Comments On URA May 2022 Developer Sales

On the back of more launches in May, developers sold 1,356 new private homes (excluding ECs) last month – the highest monthly volumes since November 2021 when 1,547 new units were sold.

Specially, new sale volumes registered in May more than doubled that in the preceding month as major projects including the 407-unit Piccadilly Grand and the 298-unit Liv @ MB were launched. Sales from these two projects accounted for more than 40% of total new sales last month.

Both projects achieved brisk sales during their launch, reflecting resilient buying demand for new launches despite the new set of cooling measures. Developer of Piccadilly Grand managed to sell 318 units or 78% of total units during its launch month at a median price of $2,175 psf. Homebuyers were attracted to the convenience of this project, which is an integrated development, directly connected to the retail podium Piccadilly Galleria and directly linked to Farrer Park MRT station. Another launch, namely Liv @ MB was also well-received by buyers with 236 units or around 79% of its units being sold during the first month of launch at a median price of $2,405 psf. The project is located within comfortable walking distance to the future Katong Park MRT station as well as other amenities in the area.

Notably, median new sale prices across different market segments have continued to rise in 2022YTD. The increase in prices could be attributed to resilient buying demand and the launches of projects with strong locational attributes which can command higher prices. Given heightened construction costs and low unsold inventories, developers have held firm to their asking prices.

We remain sanguine on the private residential outlook despite burgeoning recession risks as interest rates continue to rise. Underlying demand in the private residential market remains resilient given low unemployment rates and the private residential market’s strong track record and its perception as a good inflation hedge. Furthermore, upgrader demand is expected to persist given the continued rise in HDB resale prices. Also, rising interest rates may have a smaller impact on new launches as compared to the resale market, due to the progressive payment schedule for buildings under construction. As mortgage payments would slowly ramp up according to construction milestones.

Median Price of New Sales

_{Source: URA, Cushman & Wakefield Research}

New Launches in May 2022

_{Source: URA, Cushman & Wakefield Research} 

Top 5 Best-sellers in May 2022

_{Source: URA, Cushman & Wakefield Research}