SINGAPORE – New private home sales rebounded in January 2024 from a 15-year low in December 2023. However, this is still the weakest showing for that month since the global financial crisis in January 2009, pointing to a weak start to the new year.
Developers’ sales, excluding executive condominiums (ECs), rose to 281 in January 2024 from 135 units in December 2023, but were down 28.5 per cent on a yearly basis from 393 units in January 2023.
Despite the rebound, the overall sell-through rate of projects in January 2024 paled in comparison with comparable launches in January 2023, Ms Tricia Song, CBRE’s head of research for Singapore and South-east Asia, said. Sell-through rates refer to the number of units sold out of the total number of units in the project.
Two new non-landed launches in January – the 341-unit Hillhaven and 172-unit The Arcady at Boon Keng – saw subdued demand with sell-through rates at below 30 per cent, she noted.
Soft macroeconomic conditions, buyer fatigue in the face of high private home prices, elevated interest rates and property cooling measures continued to dampen sentiment. A number of developers also held off launching new projects in the lull preceding the Chinese New Year festivities, Ms Song added.
But it was a different story for the 512-unit new EC launch Lumina Grand, which was the top seller in January 2024 with 271 units sold at a median price of $1,525 per sq ft (psf). It is a new benchmark price for new EC projects, Ms Wong Siew Ying, PropNex head of research and content, noted.
As a result, the gap between median prices of suburban non-landed new private homes and ECs narrowed to 36.4 per cent in January 2024 – the slimmest since 32.1 per cent in June 2022, she noted.
“With new EC prices likely to stay firm and new suburban home prices stabilising at around $2,100 psf, we anticipate that the median price gap between these two segments could hover at the 35 per cent and 40 per cent range in the near term,” she said. Based on Urban Redevelopment Authority data, there were 497 unsold new ECs as at the end of January, she added.
Including ECs, new home sales surged to 588 units in January 2024 from 152 units in December 2023.
Developers released 417 new units for sale, up from just 36 in December 2023 and up from 410 in January 2023. Including ECs, developers launched 929 new units in January 2024.
ERA Singapore’s key executive officer Eugene Lim said Lumina Grand’s sales performance was “within expectations, considering the 30 per cent quota allocated to second-timers was met at its initial launch”.
“We anticipate strong demand from second-timers when Lumina Grand reopens for booking on March 2, as the EC stock is set to dwindle further this year with no other EC launches,” he said.
Ms Christine Sun, chief researcher and strategist at OrangeTee Group, expects demand for ECs to remain stable due to their affordability and potential for investment, despite high interest rates and inflationary pressures.
PropNex’s Ms Wong expects overall developers’ sales in February 2024 to remain muted as no new projects are expected to be launched this month.
She sees sales picking up only from March 2024 when more projects are put on the market.
Two new projects will be previewed in February – the 267-unit Lentoria and the 17-unit Koon Seng House – and are expected to launch in March, Ms Wong added.
CBRE’s Ms Song sees a healthy pipeline of new launches in the first quarter, which could support sales in March.
These include suburban projects such as the 440-unit Sora in Yuan Ching Road, the 533-unit Lentor Mansion, city-fringe projects such as the 142-unit The Hill @ One-North and city projects such as the 683-unit Marina View Residences.
While the stricter additional buyer’s stamp duty measures will continue to deter foreign buyers and investors, sales continue to be driven by demand from local owner-occupiers, said Ms Chia Siew Chuin, JLL’s head of residential research for Singapore.
But with ample new launch options, buyers will be selective. While developers will likely adopt more sensitive pricing strategies, significant price corrections are not expected, given the high land and development costs already invested, she added.
Small wonder that the number of unsold units has increased to 7,936 (excluding ECs) in January 2024 from 6,246 units in December 2023, noted Mr Nicholas Mak, chief research officer of property search portal Mogul.sg.
“This is worrisome as home buying this year could be moderately weak due to the slow economic growth and uncertainties in the employment market. This would create headwinds for property sellers and developers,” he added.
Mr Leonard Tay, Knight Frank Singapore’s head of research, expects private housing demand to be conservative in early 2024.
“But the first sign of possible interest rate cuts might just be the catalyst to usher home buyers back into the market. After all, employment levels remain healthy, with overall affluence unaffected despite the tepid economy in 2023,” he said.
