Huttons’ comments on December 2021 developer’s sales

Developers launched 383 units and sold 650 units in December. Sales in December are 58% lower than November 2021 and 46.6% than a year ago.

The market caught a chill after the Government imposed cooling measures on 16 December 2021. The year-end festivities, preparation for a new school term and overseas holidays via the VTLs played a role in the lower overall sales. Developer’s sales in December tend to be lower than November. In the last 14 years since URA started provision of data, only December 2012 and 2020 saw higher sales than November. Developers sold on average 594 units from 2007 to 2020. In comparison, December 2021’s 643 units is within expectations.

Comparison of sales in November and December (2007 to 2021)Source: URA, Huttons Research

32.0% of the transactions in December are priced below $1.5 million, 32.5% are between $1.5 million to $2 million and 35.5% above $2 million. 83.0% of purchases are by Singaporeans with PRs and foreigners making up 12.6% and 4.2%, respectively.

Table 1: Purchases by Residential Status and Price Range in DecemberSource: URA, Huttons Research

As of 10 Jan 2022 Sales in the Rest of Central Region made up 44.9%, Outside Central Region 34.5% and Core Central Region 20.6%.

The top ten private residential projects for December 2021 are: Source: URA, Huttons Research

Developers sold 69 EC units in December. The estimated number of unsold EC units in the market is 125. Parc Central Residences is fully sold as of mid-January 2022 and the number of unsold units is estimated to be around 100 currently. According to a Parliamentary reply on 11 Jan 2022, the percentage of households with a TDSR above 55% is 3%. This shows that most households will not be impacted by the reduction in TDSR. An analysis based on caveats lodged in Dec 2021 revealed that buyers went for a bigger and pricier unit after the cooling measures, translating into a higher overall quantum paid for homes. Based on the latest 3Q 2021 figures from Singstat on Household Balance Sheet, the gap between currency and deposits and mortgage loans is 2.1 times, indicating ample liquidity in the market. It can thus be inferred that buyers are prudent in their purchases and are likely to have little difficulty to meet their mortgage obligations should interest rates rise.

Source: URA, Huttons Research

There will be only one launch in January 2022 – Belgravia Ace. Interest is understood to be very strong for the freehold strata-landed project. It is likely to be the largest freehold strata-landed project in 2022. A strong sell-out for the project will send a positive signal to the market.

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