SINGAPORE – With developers holding off new launches due to the Chinese New Year holiday, coupled with softer economic conditions and buyers’ fatigue, new private home sales plummeted to their weakest February showing since 2008 when 174 new units were sold.

Just 149 units were sold in February, compared with 281 transacted in January. This is a 65.6 per cent drop from 433 a year ago.

While some buyers held off in the face of ample new launch options and in the hope of interest rate cuts later in 2024, sentiment was also hit by soft macroeconomic conditions, still-high financing costs, higher new home prices and property cooling measures, analysts said.

With developers prioritising sales from earlier released projects, the number of newly launched units plunged 89.2 per cent month on month to 45 units in February.

“This marks the lowest February launch tally since the Urban Redevelopment Authority began providing monthly project launch and sales data in June 2007,” said Ms Chia Siew Chuin, JLL’s head of residential research for Singapore.

Mogul.sg chief research officer Nicholas Mak noted that there was a backlog of residential projects slated for launch in 2024.

“Some projects were supposed to be launched in 2023 but were instead held over to this year. All of these projects are facing the five-year additional buyer’s stamp duty (ABSD) deadline. Any further delay in their launches would shorten the runway for the developers,” he said.

Meanwhile, in the prime district, median unit prices of non-landed new private homes excluding executive condominiums (ECs) fell by 3 per cent month on month to $3,087 per square foot (psf) in February.

Median unit prices in the city fringe dipped 0.5 per cent to $2,561 psf, while those in the suburbs fell 1 per cent to $2,059 psf, Ms Chia noted.

This could be due to “lower unit pricing for homes with larger floor areas or less desirable attributes”, she said.

New private home sales to foreign buyers continued to slide after the ABSD rate for this group was raised to 60 per cent in 2023. Just three transactions by foreigners were recorded in February.

A 3,035 sq ft unit at Terra Hill in Pasir Panjang was sold to a foreigner for $8.05 million, which means the buyer had to fork out $4 million in ABSD, said ERA Singapore key executive officer Eugene Lim.

The other two deals comprised a 1,087 sq ft unit at Enchante in Evelyn Road in the Newton/Novena area that sold for $3.03 million, and a 1,464 sq ft unit at Pasir Ris 8 that transacted for $2.57 million, he added.

Overall transaction volumes could pick up in March due in part to two new launches near Yishun – the 267-unit Lentoria, which sold about 19 per cent or 50 units at an average price of $2,120 psf over its March 2 to 3 launch weekend, and the 533-unit Lentor Mansion, which will open for booking on March 16.

Ms Tricia Song, CBRE’s head of research for Singapore and South-east Asia, noted that while these launches could help boost sales in the near term, “a more significant recovery is expected only if interest rates ease and the economy recovers” in the second half of 2024.

Developers’ sales could rebound to between 400 and 600 units in March, and up to five major non-landed residential projects may be launched in April and May, said Mr Lee Sze Teck, Huttons’ senior director of data analytics.

These include the 440-unit Sora in Yuan Ching Road, the 280-unit Kassia in Flora Drive in Loyang, and the 144-unit The Hill @ One-North.

In the EC market, new sales slumped by about 89 per cent month on month to just 34 in February, from 307 units in January when the 512-unit Lumina Grand EC in Bukit Batok was launched, said Ms Wong Siew Ying, head of research at PropNex.

“EC sales are expected to pick up in March with Lumina Grand having sold around 60 units, following a second round of balloting for second-timer buyers on the weekend of March 2 to 3,” she added.

Excluding ECs, new private home sales in February were concentrated in the city fringe and suburbs, said Ms Christine Sun, chief researcher and strategist at OrangeTee Group.

She noted that 38.9 per cent or 58 units were in the city fringe area, while 38.9 per cent or 58 units were in the suburbs, and the remaining 22.1 per cent, or 33 units, were in the prime district.

“This is the third consecutive month when the prime district has had the smallest proportion of developers’ sales due to a lack of new luxury launches,” Ms Sun said.