According to figures published by URA on the 15th of September, developers sold 394 new homes, excluding executive condominiums (ECs) for August. This is an 72.1% m-o-m plunge from the 1,412 units sold in July which represented a twenty-month record. In a y-o-y perspective sales decreased by 10% when compared to the 438 new homes that were sold on August 20, 2022.
The drop in sales for the month of October is due to fewer launches. “The phenomenal sales that were reported in July would always be difficult to be able to follow in August, as it coincided with the beginning of Hungry Ghost month, an epoch when the market activity slows because of the lack of new launches,” says Wong Siew Ying, head of content and research for PropNex Realty.
Excluding ECs Four new projects were unveiled in August. These include the 78-unit Orchard Sophia in the Core Central Region (CCR) The 324-unit TMW Maxwell located in the Rest of Central Region (RCR) as well as thirty-six units of Lakegarden Residences Lakegarden Residences and the 100-unit the Arden located in The Arden in the Outside Central Region (OCR).
The new developments were all launched during the first half of August, just prior to the beginning of the seventh lunar month on August 16. Five90 new homes were built which is 73% lower than the 2,156 homes launched earlier in the month% less than the 2,156 homes launched in the month prior.
The results of the latest private launches was less than in comparison the month of July. none project having a take-up rate higher than 30% of the units sold in Orchard Sophia with a median price of $2,808 per sq ft as noted by Tricia Song. She is CBRE director of research in Singapore as well as Southeast Asia. Comparatively, the private launches that were launched in July saw taking rates of between the 29% up to%.
Leonard Tay, head of research at Knight Frank Singapore, attributes the drop in sales to a softer buyer resentment. “Homebuyers are becoming more cautious and taking time to review the list of developments that have been released in recent months, and also coming releases,” he says.
Tay states that, with the increase in rates of interest in the last year and the economic uncertainty affordability has been a major issue for homebuyers. This means that it has fueled a steady interest in EC projects. 360 units of Altura EC located in Bukit Batok that was launched on August 1, was by far the most successful project in the month of August, with 215 units (63%) sold at an average price of $1,480 per sq. ft.
Excluding ECs and ECs, the OCR recorded the highest amount of sales for new homes at 192 units, or 49% of all developer sales. OCR sales were helped by new launches and The Lakegarden Residences clocking in as the second highest-performing home in August after securing the 73 units with the median price of $2,101 per square foot. However, OCR sales in August were 61% lower than the m-o -m.
For the RCR, developers sold 106 new homes (27% of total sales) in the RCR, which was which is down to 87% in a month. However home sales within the CCR were up 9% on a m-o – basis up to 96 homes, aided by the introduction the new Orchard Sophia. Orchard Sophia.
In terms of buyer profiles According to PropNex’s Wong says that home purchases from foreign buyers were relatively modest in August with caveats that show just 12 private houses purchased by the group, or 3% of the total monthly sales. On the other hand, 17% of private home sales that were not landed were made by Singapore PRs, and around the same amount of% of them were Singaporean buyers.
The sales will remain muted through September
Based on the data from August, the cumulative number of new home sales for 2023 at 5,189 homes. This is 5.6% lower than the 5,496 units sold during the same timeframe in 2022. “We believe that the deteriorating macro environment as well as the increased rate of interest rises, as well as cooling policies have slowing sales, although this is evident due to the numerous new launches that came in the months of the last two months,” notes CBRE’s Song.
The year 2022 saw developers have launched fifteen new private residential projects that comprised 428 units available to be sold. Comparatively, CBRE estimates that developers have launched 17 new projects worth 6,773 homes in the first quarter of this year. Song believes that the demand from home buyers has been “mostly abated” and the cost of homes has risen significantly which has left investors with little options for growth.
This means that property buyers should spend more time to look around and consider their options prior to entering into an agreement to purchase. With this in mind, home sales this month may be sluggish, supported by the seventh lunar month, which spans both the months of August and September according to PropNex’s Wong.
But, sales should be booming in the months of October and November, with new developments likely to hit the market, such as Hillock Green in Lentor Central and J’Den which is a renovation from the old JCube situated in Jurong East, she adds.
Knight Frank’s Tay estimates that new home sales are in the process of reaching between 7,000 and 8,800 units, which is consistent with the projections of Hutton Asia. “With the possibility of ten new launches planned beginning in October 2023 developer sales could close the year with 7,000 to 8000 units, which is still more than 2022’s 7,099 units, despite the uncertainties in the economy,” says Lee Sze Teck, Huttons’ senior director of data analytics.