top of page

Property Herald - Jump In Developers’ Sales In April Not Due To Foreign Demand

In the wake of April's property cooling measures, Nicholas Mak dives into the private property developer sales for the month, debunking if the latest curbs have actually made the desired impact the government was looking for.

Blossoms by the Park took the property market by storm, selling 75% of units on launch weekend, despite the recent property cooling measures.
Blossoms by the Park took the property market by storm, selling 75% of units on launch weekend, despite the recent property cooling measures.

Introduction


Based on the latest numbers released by the Singapore government on the primary private housing market sales, developers released 779 private residential property units (excluding Executive Condominiums) in April 2023, an increase of 36.0% over the previous month.


However, the number of private housing units sold by developers jumped by 80.3% month-on-month (mom) to 887 units, tapping from residential developments that were previously launched. The increase in property sales last month was mainly due to the launch of two new condominium projects, namely the 275-unit Blossoms by the Park and the 638-unit Tembusu Grand.


New project launches in April


The two new residential launches dominated the primary market in April. A total of 559 units were sold across these two projects in April, making up 63.0% of the primary market sales volume in the month. If not for the launch of these two projects, the property primary market sales in April would be more subdued.


Located at the Tanjong Katong area, the 99-year leasehold Tembusu Grand was launched in early April 2023 and 354 units were sold at the median price of $2,463 psf.


Table 1: Residential projects launched in April 2023

​Property Name

Location

Nearest MRT Station

Total No. of Units

No. of Units Sold (Apr 2023)

Median Price ($psf)

Tembusu Grand

Jalan Tembusu

Tanjong Katong

638

354

$2,463

Blossoms By The Park

Slim Barracks Rise

Buona Vista

275

205

$2,427

Source: Mogul.sg, URA


Over at Buona Vista, Blossoms by the Park was launched in the first weekend after the government introduced the latest round of cooling measures towards the end of April. The preview of this project was held before the government implemented the market curbs and the project was well-received by potential buyers.


Immediately after the implementation of the property curbs on 27 April, a pall of uncertainty hung over the property market. However, the successful launch of Blossoms by the Park with about 75% of the 275 units sold in the first weekend of the launch dispel much of the uncertainty.


Does the market need the latest cooling measures?


The main thrust of the latest round of property market cooling measures was the increase of the Additional Buyer’s Stamp Duty (ABSD) for investors, foreign buyers and companies. What stood out was the sharp rise in ABSD for foreign homebuyers and entities by 30 basis points to 60% and 65% respectively.


The government’s action raised the question on whether there could be some signs that there could be a trend of an increase in buying demand from foreigners and entities such as companies. However, an analysis of the profile of the buyers in the private residential primary and secondary markets does not show that there is an increase in foreign demand for local properties that could heat up the market.


Sell your property commission free, with a licensed agent - only at www.mogul.sg/sell

Foreign demand for local properties


The increase in the private residential primary market property sales in April was not due to a rise in the homebuying demand from foreigners. An analysis of the number of private homes sold by developers since January 2023 shows that the proportion of private homes bought by foreigners remained stable in this March and April at 7.8% and 8.0% respectively, after declining from 14.0% in January.


At the same time, the proportion of private homes bought by permanent residents in Singapore has also declined over the past two months, to 9.3% in April 2023.


Table 2: Private residential primary market property sales based on buyer’s resident status

Singaporeans

Singapore PR

Foreigner

Companies

Total

Jan 23

71.2%

14.2%

14.0%

0.5%

100.0%

Feb 23

71.2%

16.4%

12.4%

0.0%

100.0%

Mar 23

77.9%

13.9%

7.8%

0.4%

100.0%

Apr 23

82.6%

9.3%

8.0%

0.1%

100.0%

May 23 (prelim)

86.4%

11.8%

1.8%

0.0%

100.0%

Source: Mogul.sg, URA


On the other hand, the proportion of private homes bought by Singaporeans increased steadily from 71.2% in January to 82.6% in April 2023.


The high ABSD levied on companies buying residential properties has discouraged buyers from acquiring private housing through companies. As a result, the proportion of private homes bought by companies are minimal at less than 1%.

The cooling measures implemented in April specifically targeted foreigners and companies looking to purchase private residential properties.
The cooling measures implemented in April specifically targeted foreigners and companies looking to purchase private residential properties.

The preliminary numbers of May 2023 shows that many foreign buyers are staying away from the Singapore property market due to the latest round of cooling measures. Only 1.8% of the private homes sold in the primary market in early May were purchased by foreigners.


The Residential Resale Market


The level of housing demand from foreigners in the private residential secondary market has been quite stable this year, ranging between 3% and 4.6% of total number of units transacted each month. The proportion of private homes bought by foreigners dipped to 3.1% in May likely due to the latest cooling measures.


Table 3: Private residential secondary market property sales based on buyer’s resident status

Singaporean

Singaporean PR

Foreigner

Companies

Total

Jan 23

75.5%

18.5%

4.5%

1.4%

100.0%

Feb 23

69.4%

20.0%

3.8%

6.8%

100.0%

Mar 23

73.4%

20.1%

4.6%

1.8%

100.0%

Apr 23

79.0%

16.2%

4.2%

0.6%

100.0%

May 23 (prelim)

81.4%

12.4%

3.1%

3.1%

100.0%

Source: Mogul.sg, URA


Outlook


Since homebuying demand from foreigners only plays a small part in the Singapore private housing market, the latest round of property market curbs would have limited impact on the housing market in the short term. Local buyers appear to be ready to pick up the slack from the retreat of the foreign buyers.


On the other side of the coin, there would be more supply in the primary market. As there could be another ten more residential projects that could potentially be launched for the rest of this year, they would boost the property sales volume when they are released. As a result, developers’ sales for the whole of this year could still reach a decent 7,300 to 8,000 private housing units, which is more than the 7,099 units transacted last year.


---






Comments


bottom of page