Singapore new private home sales dropped by 72 percent in August from the previous month to 394 units as developers rolled out fewer projects.
Data from the Urban Redevelopment Authority (URA) on Friday showed that developer sales of new homes in August, excluding subsidised housing or the hybrid public-private executive condo segment, fell from the 20-month high of 1,412 units achieved in July. Year on year, last month’s tally was also 10 percent below the 438 units sold in August 2022.
Last month’s drop in sales matched the 73 percent slide in new homes launched by developers, with just 590 new units entering the market in August, compared to the 2,156 homes introduced in July. Sales at the four new projects launched last month, which include Orchard Sophia in downtown Singapore and TMW Maxwell in the city-fringe as well as Lakegarden Residences and The Arden in the suburbs, accounting for the majority of sales in those locations.
“The stellar sales in July was always going to be a tough act to follow in August, which coincided with the start of the Hungry Ghost month – a period where market activity tends to slow due to fewer launches,” said Wong Siew Ying, research and content head at PropNex Realty. “Buyers could also be experiencing some fatigue following a spate of new launches in the last few months.”
Project Launches Drive Sales
For the first eight months of the year, overall private home sales reached 5,189 units, excluding executive condos, which was down 5.6 percent from 5,496 units sold during the same period last year.
URA data showed Wing Tai Holdings’ 306-unit Lakegarden Residences in Jurong district was the best-selling project last month with 73 units finding buyers following its launch on 5 August, with the developer achieving a median price of S$2,101 per square foot for the project.
Together with the 30 units sold at Qingjian Realty’s 105-unit The Arden project in District 23, the two developments launched last month propped up Singapore’s suburban housing market as their combined sales made up more than half of all the 192 units sold in the Outside Central Region (OCR).
However, with 103 units sold out of the 411 homes launched in the two projects, the performance showed that buyers are willing to leave units in new developments on developers’ books as Singapore’s housing pipeline begins to yield more choice.
Market activity in the OCR topped all regions in the city-state during August, although this total was still 61 percent below the 488 units sold in the area during July, when developers launched 460 new homes in the region.
This change in the market was also reflected in developer bookings with average home prices in the suburbs dipping 1 percent to S$2,068 per square foot median price in August from S$2,085 per square foot a month earlier, based on PropNex’ analysis of URA data.
The fresh project launches in the downtown core also helped boost sales in the area by 9 percent to 96 units in August from 88 units the month before, as buyers snapped up new supply after no new projects entered the market in July.
Within the Core Central Region, a proxy for the city’s luxury residential market, Orchard Sophia near Orchard Road recorded the most sales with buyers taking up 24 out of its 78 available units at a median price of S$2,808 per square foot.
PropNex data showed median prices fetched in the city centre also dipped last month to S$2,852 per square foot from S$2,902 per square foot in July in the face of the new supply.
Gordon Tang-controlled SingHaiYi and Chip Eng Seng launched their 324-unit TMW Maxwell project near Chinatown last month, however, the development recorded just six sales as turnover in the urban fringe areas, known locally as the Rest of Central Region (RCR), dropped to 106 homes in August from 836 units in July.
The RCR, unlike the two other regions, posted a 4.4 percent increase in the median price of new homes to S$2,613 per square foot last month, with PropNex attributing the uptick to firm pricing stances at TMW Maxwell, as well as SingHaiyi Group’s Grand Dunman and the Pinetree Hill project being developed by UOL Group and its Singapore Land subsidiary, with the latter two projects having been launched in July.
Activity to Pick Up in Q4
For this month, Wong expects September home sales to remain muted since no projects are scheduled to launch and with the market still flooded with the supply from development debuts in recent months.
Leonard Tay, head of research for Knight Frank Singapore, sees purchases for self-use supporting the private housing sector for the rest of the year while investors and foreign buyers are deterred by rising interest rates and the lingering impact of three rounds of cooling measures since December 2021.
“Investors, both locals and foreigners, will likely remain on the sidelines until interest rates peak and stabilise, and until such time when more optimism returns to the economy,” he said.
PropNex’s Wong said market activity will likely pick up from October with at least two major projects slated for launch in the fourth quarter – the 474-unit Hillock Green condo in Lentor Central and the 368-unit J’Den Residences development in Jurong Lake District.
The two property agencies predict full-year home sales will reach between 7,000 and 8,000 units in 2023, consistent with last year’s total of 7,099.