The “quadruple whammy” of the Chinese New Year pause, diminishing housing supply, cooling measures, and global uncertainty from the Russia-Ukraine conflict slowed new private house sales in February.

According to figures released by the Urban Redevelopment Authority (URA) on Tuesday, developers in Singapore sold 527 new private residences in February, down 22.5 percent from January’s 680 units (Mar 15). In February 2021, 645 new private residences were sold, which is an 18.3 percent decrease.

The number sold last month was the lowest since 487 units were sold during the Circuit Breaker period in May 2020.

Last month, 559 executive condos (ECs), which are a combination of public and private housing, were sold, down 23.6 percent from January.

Despite developers offering 194 units (excluding ECs) for sale on the market, a 9 percent increase over January’s 178 units and a 16.2 percent increase over February 2021’s 167 units, the decrease occurred.

Demand Outstrip Supply

Demand has outstripped supply over the last year, according to OrangeTee & Tie senior vice-president of research and analytics Christine Sun, and new house sales have outpaced units introduced each month. As a result, the number of units released but unsold has steadily decreased.

“Excluding EC, the launched but unsold units fell 47.0 percent from 6,819 units in February 2021 to 3,611 units in February 2022,” she said.

The 32-unit Royal Hallmark, a freehold boutique development in District 15, was the sole new project launched this month, and it sold 10 apartments at a median price of S$1,905 per square foot (psf) at its opening on Feb 26.

Sun also predicts the supply situation to deteriorate this year, with the number of new houses set to be released dropping by roughly 20% to about 9,000 units (including EC) for the whole year of 2022.

More Sites to be released in 2022

“While additional land parcels from the Government Land Sales (GLS) program will be released in the first half of this year, new residences will not be available until next year,” she added.

Sun went on to say that since property demand is typically influenced by market mood, some purchasers may have been put off by the rising global uncertainty. The war between Russia and Ukraine has had a global influence on companies, impacting oil, natural gas, and stock prices.

The Global uncertainty may have provide homebuyers some good news since developers maybe “uncertain” too and won’t anyhow raise their prices, but rather sell at a fair market value. Upcoming freehold condo at 33 Devonshire Road might be a good choice as its located at the heart of Somerset, Singapore District 9.

She did say, though, that rising tensions might lead to a resurgence in demand for “safe-haven items.”

Property Investment to hedge against Inflation

“As investors move their emphasis back to defensive asset classes like homes, looming concerns may instead boost our real estate market,” Sun added.

Such concerns, according to Lee Sze Teck, might drive investors to “safe havens like Singapore.” He said that foreigner purchases have trended upward in the last two months compared to December 2021, when the cooling measures were enacted.

Singaporeans made 79.1 percent of total purchases last month, with PRs and foreigners accounting for 15.8 percent and 4.9 percent, respectively.

The Business Times reported that Tuesday’s figure was higher than a consultant’s estimate of 490 units.

The Rest of Central Region (RCR) (226 units) had the greatest sales last month, followed by the Outside of Central Region (OCR) (160 units) and the Core Central Region (CCR) (101 units).

“A good conclusion from February sales was that the share of purchases worth more over S$2 million remained unchanged from before the cooling measures.” This indicates that, despite the cooling measures, affordability has not altered since there is still enough of liquidity in the market,” Lee said.

Last month, 39.2 percent of sales were valued at more above S$2 million. He said that 35.6 percent of new house sales in February were priced between S$1.5 million and S$2 million, with 25.3 percent priced below S$1.5 million.

A record 35,000 HDB apartments are expected to reach the end of their Minimum Occupation Period this year, according to Nicholas Mak, ERA Realty’s director of research and consulting. This year, a record 35,000 HDB flats are expected to reach the end of their Minimum Occupation Period.

“By contrast, in the 10-year period from 2009 to 2018, an annual average of 8,500 HDB flats reached the end of their MOP before the flood of such MOP HDB apartments in 2019 to 2022,” he added.

Relaxation in Showflat Viewing Restriction

According to the latest multi-ministerial taskforce (MTF) pronouncements, capacity limitations on display flats have been lifted to 1,000 people at any one time, including salespeople, developer’s personnel, and agents, as of Tuesday (Mar 15).

“However, if there are more than 1,000 people present at any one moment, the capacity restriction for the display gallery should be based on 10 square metres per person,” URA noted.

Otherwise, although safe-distancing between masked persons and groups is suggested, it will no longer be needed, according to URA.

While the recent relaxation of showflat limitations is a “good development,” analysts say there are “other important” aspects that influence market mood and sales, such as those mentioned previously.