Singapore new private home sales plunged 83 percent to 135 units in December from the 784 units transacted the previous month, posting the lowest monthly sales recorded in the city-state since the 2007-08 global financial crisis.
The year-end holidays and the absence of new project launches dragged last month’s tally to its lowest level since January 2009, when only 108 homes changed hands, according to OrangeTee & Tie’s analysis of data released by the Urban Redevelopment Authority on Monday.
The January dip comes after developers sold an estimated 6,452 homes excluding public-private housing for the whole of 2023, sliding 9 percent to mark Singapore’s lowest annual private home sales since the 4,264 units transacted in 2008. With borrowing costs still elevated and as global market uncertainties linger, CBRE Singapore research head Tricia Song expects the downturn to stretch into the first half of 2024.
“Sentiment this year has clearly deteriorated with higher interest rates, softer economic prospects and two more rounds of cooling measures since,” Song said. “In the near term, downbeat macroeconomic conditions, cooling measures and elevated interest rates are likely to continue weighing on the private residential market but sentiment could improve in H2 2024.”
Gearing Up for New Year
The December sales dip mirrored the 96 percent supply drop when developers placed just 36 new units up for sale last month, compared with the 970 condos made available in November when three new projects were launched.
Chia Siew Chuin, JLL’s head of residential research, noted that developers held back new project launches during the holiday season to allow them to launch in the new year instead, with three private condo projects set for launch in the coming weeks: the 341-unit Hillhaven in Hillview Rise, the 172-unit Arcady at Boon Keng and the 59-unit The Hillshore at Pasir Panjang.
Most of last month’s sales came from projects launched earlier in the year, led by the Continuum project by Hoi Hup Realty and Sunway Developments in Geylang, as well as City Developments Ltd’s The Myst condo project in Bukit Timah.
Developers put 7,551 units of private homes on the market last year, up 67 percent from 2021, but the number of homes sold slid by 9 percent, and represented only half of the 13,027 sales booked in 2021. That slide came as the average take-up rate of major projects within the first month of launch slowed to 55 percent in 2023 from 72 percent in 2022.
“The overall slowdown in new sales and take-up is reflective of the buyers’ cautious approach and resistance to high prices amid downbeat macroeconomic conditions, high mortgage rates, market cooling measures and ample new housing options in the market,” Chia said.
Prices Pull Back
Last month’s muted trading activity also was reflected in private home prices.
The median unit price of new private homes in downtown Singapore fell 7.3 percent to S$2,962 ($2,223) per square foot in December from the month before, while condo prices in the suburbs dropped 9.1 percent to S$2,123 per square foot during the same period, according to PropNex data.
Prices in the city fringe, meanwhile, inched up 2.1 percent to S$2,614 per square foot last month, the property agency said
About 30 new projects with 12,000 new homes are to be launched across the country this year, according to Christine Sun, senior vice president for research and analytics at OrangeTee, with the upswing in supply likely to continue the cooling trend in home prices seen last year.
“Even if developers stagger their launches or face unforeseen circumstances, we still anticipate 23 launches, which could yield up to 8,800 units,” Sun said. “Some price pressures may be alleviated since there will be more supply this year.”
She expects new private home prices to grow at 2 to 4 percent in 2024, compared with last year’s estimated full year increase of 6.7 percent. That 2023 pace already trailed the 8.6 percent jump in prices recorded a year earlier.
Leave a Reply