Singapore Government’s Warning of Cooling Measures Spurred More Launches

SINGAPORE, 15 February 2021 – According to the January 2021’s private housing primary market sales information released by the Singapore Government, the number of private housing units, excluding Executive Condominium (EC), launched for sale had increased steadily from November 2020 to January 2021 on a year-on-year basis. In January 2021, real estate developers launched 2,600 private residential units for sale, which was 334.8% more than the same period in 2020. This was after a 264.6% year-on-year (yoy) increase in the number of units launched in December 2020.

There has been growing speculation that the government could introduce new market cooling measures in the face of the robust homebuying demand. Last month, both the Deputy Prime Minister and National Development Minister gave veiled warnings of more property market curbs. The high number of housing units launched in the past month could be a respond to such warnings.

As more housing units were launched, the number of units sold by developers also increased. Hence, the government’s warning actually heated up the market in the short term.


Table 1: Private residential property market launch volume

Date Private housing units launched %yoy
Jun-20 597 -10.9%
Jul-20 869 -4.6%
Aug-20 1,582 55.9%
Sep-20 1,340 -21.8%
Oct-20 423 -53.5%
Nov-20 1,375 45.2%
Dec-20 1,349 264.6%
Jan-21 2,600 334.8%


More units sold but at slower pace
The number of private housing units (excluding EC) sold in the primary market also increased from 654 units in October 2020 to 1,609 units last month, but at a slower pace compared to the rate of units launched.


Table 2: Private residential property market sales volume

Date Private housing units sold %yoy
Sep-20 1,329 4.6%
Oct-20 654 -29.8%
Nov-20 774 -33.6%
Dec-20 1,217 126.2%
Jan-21 1,609 159.5%

Source: ERA Research, URA


From November 2020 to January 2021, the rate of growth of the number of private residential units sold each month was slower than the number of units released for sale. Although the number of units sold in December 2020 and January 2021 increased by more than 100% yoy in each month, the number of units launched jumped by more than 200% yoy in the same two months.

Therefore, the rate of growth of developers’ sales was less than half of that of the units launched in the past two months. In other words, demand was not keeping pace with supply.

New project launches
Two giant housing projects were launched last month. The 1,862-unit Normanton Park is the largest residential project and Parc Central Residences is the largest EC project expected to be launched in this and next year.


Table 3: New residential launches in January 2021

Project Name Street Name Property Type Locality Total Number Of Units In Project No. of units sold In The Month Median Price ($psf) In The Month
Normanton Park Normanton Park Condo RCR 1,862 625 $1,763
Parc Central Residences Tampines Street 86 Exec Condo OCR 700 417 $1,177
The Reef At King’s Dock Harbourfront Avenue Condo RCR 429 221 $2,276

Source: ERA Research, URA


As private housing supply outpaced demand in recent months, the take-up rate as measured by the ratio of units sold to the number of units launched in each month had remained below parity in November 2020 to January 2021. As a result, the number of private housing units launched and unsold had grown steadily from a trough of 4,833 units in July 2020 to 7,226 units last month.


Table 4: Private residential take-up rate

Date Private housing Take-up rate
Aug-20 79.5%
Sep-20 99.2%
Oct-20 154.6%
Nov-20 56.3%
Dec-20 90.2%
Jan-21 61.9%

Source: ERA Research, URA


The slower absorption rate indicates that the local private residential property market is not overheated. If the government were to introduce more cooling measures this year to curb housing demand, it would result in an oversupply of private and EC housing units, which in turn would lead to negative impact on other sectors in the economy, such as the banking, finance and construction industries.


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