News

SINGAPORE - New private home sales plunged to a 16-year record low for the month of August, as developers held back on new launches during the Hungry Ghost month and price-conscious buyers remained sidelined by higher new launch prices, elevated interest rates and cloudy macroeconomic conditions. But sentiment could get a boost from a which could happen as early as this week when the US Federal Open Market Committee meets on Sept 18, along with a still-low unemployment rate, resilient household balance sheets, and low unsold inventory, analysts say. According to Urban Redevelopment Authority data released on Sept 16, developers released for sale in August 272 new units from earlier projects, down from 616 new units launched in July. They sold just 208 private homes in August, excluding executive condominium (EC) units, down 63.5 per cent from 571 in July and 47 per cent lower than the 394 units sold in August 2023. “This is a record low for the month of August since 325 units were sold in August 2008 – 2024 is shaping up to be the weakest in terms of annual new sales since 4,264 units were sold in 2008, with market sentiment cautious since late 2023,” said Ms Tricia Song, CBRE’s head of research for South-east Asia. The January to August 2024 tally of new homes sold is 2,668 units, down 48.6 per cent from 5,190 units over the same period in 2023. This follows 2024’s first-half sales of 1,889 units – also a record low for half-year developer sales – below the previous floor of 1,977 units during the global financial crisis in the second half of 2008, CBRE said. The build-up of unsold units also underscores slowing new sales momentum, noted Ms Chia Siew Chuin, JLL’s head of residential research for Singapore.  “The cumulative number of new private homes launched but unsold grew 2.7 per cent to 3,595 units in August from July. Since December 2023, the number of such units has grown by 6.8 per cent,” she said. But the resale market is relatively active in August, with 1,076 caveats recorded, comparable to 1,069 resale caveats recorded a year ago. Nonetheless, the resale tally is 13.9 per cent lower than the 1,249 caveats in July, Ms Chia said. From January to August 2024, the monthly average for new sales remained muted at 338 units sold, compared with the monthly average of 556 in the same period in 2023, 616 in 2022, and 1,114 in 2021, Knight Frank research head Leonard Tay said. “Even in 2020, when movement restrictions were imposed during the pandemic, the monthly average was 861 units sold,” he pointed out. But most analysts believe that new sales volume should rebound in September when several new launches hit the market, and if the economy improves and interest rate cuts materialise. The upcoming projects include the 158-unit 8@BT on the Bukit Timah Link government land sales site near Beauty World, the 226-unit Meyer Blue in the East Coast area and Union Square Residences in Havelock Road. The suburbs outperformed the other submarkets in August, accounting for 59 per cent of overall new private homes sold. This was despite sales dropping by 72.3 per cent month-on-month to 123 units, JLL said. The Lentor area continued to see steady interest, with projects there – Hillock Green, Lentoria and Hillhaven – collectively accounting for 37.4 per cent of total units moved in the suburbs. With the HDB resale price index rising 2.3 per cent in the second quarter of 2024, up from 1.8 per cent in the first quarter, upgrader demand should continue to support the suburban and city-fringe submarkets, Ms Song said. In the EC market, developers sold 36 new units in August, down 2.7 per cent from 37 units transacted in July, with North Gaia in Yishun selling 24 units at a median price of $1,306 per sq ft, PropNex said. “There are now around 200 units of unsold new ECs, and the tight supply should bode well for the next project coming onstream – the 504-unit Novo Place EC in Plantation Close in Tengah,” said Ms Wong Siew Ying, PropNex head of research and content. A slew of new property launches in the second half of 2024 could result in more sales transactions, said Ms Christine Sun, chief researcher and strategist at real estate firm OrangeTee Group. “There were only 1,938 units launched for sale in the first half of 2024. In comparison, Emerald of Katong (847 units) and The Chuan Park (916 units) in Lorong Chuan – two new launches among several expected in the second half – in themselves will yield more than 1,700 units,” she noted. Other new projects expected to launch by the fourth quarter include Nava Grove at Pine Grove (552 units), Norwood Grand in Champions Way and Novo Place EC.