New private home sales could moderate for the rest of the year: experts

Rising interest rates will impact buying sentiment.

As rising interest rates may not come to an end, property experts are seeing buying choices for homes will continue to diminish, which will moderate new private home sales.

Tricia Song, head of research in CBRE Southeast Asia, said they expect new home sales to reach 9,000 units from 13,027 new homes sold last year.

“Transaction volume is expected to moderate for the rest of the year as interest rates continue to rise and dampen buying sentiment,” explained Song, adding that private home prices are expected to rise by 5%.

For Lam Chern Woon, research head of Edmund Tie, the number of units sold could be slightly higher to 10,000. 

“Private residential price growth is projected to ease to about 8% for the whole of this year, following last year’s 10.6%. However, the market upcycle remains intact given the healthy labour market conditions, strong household balance sheets and the tight demand-supply dynamics,” he said.

Knight Frank research head, Leonard Tay, said new launches later this year could attract Singaporeans, who are experiencing slow build-up of wealth.

“With earlier generations of Singaporeans becoming wealthy from the days of independence to a developed economy, capital inevitably gets recycled from an older generation to the next,” said Tay.

Comments from these property experts came after recent figures from August showed that new home sales went down by 47.6% in August 2022 due to lack of new supply.