Based on statistics issued by the Urban Redevelopment Authority (URA) on September 16, developers sold 208 new residences excluding executive condos (ECs), representing a notable 63.6% month-on—-drop from the 551 units sold in July. Including ECs, the general new house sales also dropped drastically by 59.9%, from 608 units in July to just 244 in August. The lack of new launches in August can be blamed for the sharp decline in sales since developers usually refrain from unveiling fresh projects during the seventh month of the lunar calendar, covering August 4 through September 2 this year. Traditionally seen as inauspicious, this time frame causes many developers to delay starting new projects.
Rather than fresh starts, August’s residences sold by developers mostly came from already underway projects. Compared to the 616 units introduced in July, August saw a 55.8% m-o-m decrease release of 272 new residences for sale. The start of prominent projects like the 440-unit Sora in Jurong Lake District and the 276-unit Kassia in Changi helped to support July’s higher sales by increasing market activity. Without such fresh introductions in August, the market experienced a notable decline in both unit sold and launched count.
Examining the year-on- year (y-o-y) performance, the picture stays dark. Comparing sales in August to the 394 new homes sold in August 2023, sales fell 47.2%. Developers have sold 2,656 apartments year-to- date, 48.6% less than the 5,190 units sold between January and August of the previous year. This huge drop emphasises the difficulties the market will confront in 2024. With 325 new homes sold last month, Tricia Song, CBRE’s head of research for Southeast Asia, said that the lowest recorded August home sales since 2008. After the 153 units from February, it also shows the second-lowest monthly sales amount this year.
Song also points out that the subdued sales speak to a cautious attitude among homebuyers, who remain reluctant due of poor economic conditions, increasing mortgage rates, and opposition to high pricing points. With just 4,264 units sold in 2008, 2024 is looking to be the lowest year for new private home sales since then. Song says, “Market sentiment has been cautious since late 2023; the trend is likely to persist unless there is a notable improvement in the larger economic environment.”
The aggregate median transaction price of newly built private homes rose sharply even as sales volume fell sharply. From $1.7 million in July to almost $2.4 million in August, Wong Siew Ying, head of research and content at PropNex Realty, said the median price of new residences surged by 42% m-o-m. Wong ascribes this increase to August’s increased percentage of units sold at higher price points. Driven by the debuts of Sora and Kassia, July saw a greater proportion of less expensive units sold—about 41% of new residences transferred below $1.5 million. Fresh releases, according to Wong, usually feature a greater spectrum of less expensive smaller units. Still, the majority of transactions were in higher price ranges; just 5.9% of homes sold in August were less than $1.5 million.
Regarding demand, August’s new homebuyers concentrated mostly on suburban and city-fringe projects, which are seen as more reasonably priced and provide decent locations. Tembusu Grand came out as the most sold project last month, according Christine Sun, head research and strategist at OrangeTee Group. Moving thirty units for a median price of $2,455 per square foot (psf), the 638-unit condominium along Jalan Tembusu, in the Rest of Central Region (RCR), moved With 31.3% of August’s new home sales attributed to the RCR, it is clearly appealing to consumers looking for value as well as accessibility to the city.
On sales volume, though, the Outside Central Region (OCR) exceeded other market sectors. Comprising 59.1% of the units sold in August, the OCR sold 123 units overall. With 17 apartments sold at a median price of $2,108 psf, Hillock Green was the top-selling property in the OCR; Lentoria sold 15 units at a median price of $2,217 psf. Given the great demand in the OCR, buyers seem to be still lured to more reasonably priced solutions in outlying areas, particularly while city property prices keep rising.
In the Core Central Region (CCR), 20 flats were sold concurrently; significant sales took place at projects including One Bernam, 19 Nassim, and Watten House. Although the higher costs in the CCR still draw in wealthy consumers, generally sales in this market are still low when compared to the more reasonably priced RCR and OCR areas.
Developers in the EC segment sold 36 new residences in August, down somewhat by 2.7% m-o-m from the 37 units sold in July. With 24 apartments sold at a median price of $1,306 psf, North Gaia in Yishun generated most of EC sales. With just about 200 unsold ECs on the market, PropNex’s Wong says suggests a tightening supply that might influence demand for next projects. “The limited supply should be favourable for the next EC project, maybe the 504-unit Novo Place EC in Plantation Close in Tengah,” she says.
Seven more non-landed residences sold in the premium category in August above $5 million, up from just two such purchases in July. Although there were no transactions over $10 million in July, one was noted in August: a 4,198 square foot, four-bedroom apartment at the freehold 32 Gilstead, selling for $14.71 million ($3,506 psf.). Head of research and data analytics at SRI Mohan Sandgeran claims that in the first eight months of 2024 this agreement represents the biggest quantity traded for a freehold condo. Sandgeran points out that the deal, which took place at a usually slower period, shows the luxury market’s durability. High-net-worth people, especially Singapore Permanent Residents (PRs), he says still show great desire for prime freehold properties.
With regard to buyer demographics, Singaporeans accounted for 88.5% of new housebuyers in August, third-highest proportion of buyers this year. Lee Sze Teck, senior director of data analytics for Huttons, notes this tendency in naturalised Singaporeans, possibly a result of the punitive 60% Additional Buyer’s Stamp Duty (ABSD) applied on foreigners. From the 64 acquisitions recorded in July (11.7% of total buyers), PRs accounted for 18 new home sales in August, or 8.6% of the total, a considerable drop. Foreign purchasers made just 2.4% of new house sales in August, up much from 0.9% in July.
Looking ahead, analysts say expected Federal Reserve interest rate reduction later in the year should increase buyer confidence since lower interest rates would lower financing costs for consumers. “Buyers of new condos usually choose floating mortgage packages, and they would gain more from any drop in interest rates,” adds Sun of OrangeTee. With new home prices predicted to rise by roughly 0% to 2%, she projects between 5,000 and 5,500 new homes sold throughout 2024. Predicting new home sales to range between 5,000 and 5,500 units for the year, CBRE’s Song also projects a full-year price rise range of 3% to 4%. Song thinks that the thriving public housing market will keep supporting demand in the OCR and RCR sectors of the private property market even in case of any significant economic disruptions.
