New home sales by developers fell to the lowest level in August in 17 years

In August, new home sales fell by 64% and are 47% lower than the previous year.

Sep 16, 2024

New private home sales fell in August, as developers sold 208 new units during the seasonally quiet Ghost Month, but sales are still down 47% from the previous year.

The latest sales figure is the lowest for August since official records were made available in 2007, according to Mogul.sg chief research officer Nicholas Mak.

The last time monthly August sales fell this low was in 2008, when developers sold 325 units during the Global Financial Crisis, he said.

Tricia Song, CBRE's research head for South-east Asia, noted that transaction volume for new homes in 2024 is expected to be the lowest since 2008, when 4,264 new homes were sold, with market sentiment cautious since late 2023.

"Homebuyers' tentative stance persisted amid weak economic conditions, high interest rates, and resistance to high price points," she told reporters.

Despite a drop in developer sales in August, the overall median transacted price of new non-landed private homes increased by 42% to nearly S$2.4 million last month from approximately S$1.7 million in July, according to Wong Siew Ying, head of research and content at PropNex.

While the lower transaction volume in August may have had an impact on prices, Wong pointed out that smaller units, which are widely available in new launches, are typically transacted at a lower price quantum.

According to caveat data, approximately 59% of non-landed new homes sold in July had a unit size of 800 sq ft or less, compared to only about 24% of those sold in August, she said.

According to Urban Redevelopment Authority data released on Monday (September 16), the number of private homes sold fell by about 64% from 571 in July.

The suburban Outside Central Region remains the leader in condo and private flat sales, accounting for 77.8 percent of total sales in July.

New home sales, including executive condominiums (ECs), fell by nearly 60% from 608 units in July to 244 units in August, and were 62% lower than the 649 units sold the previous year.

In the EC segment, developers sold 36 new units in August, which was approximately the same as in July.

"There are now around 200 units of unsold new ECs on the market, and the tight supply should bode well for the next EC project that may come on later this year, that being the Novo Place EC in Plantation Close in Tengah," Wong told Reuters.

There were 272 units available for purchase in August across existing projects, a 56% decrease from 616 units in July. No new projects were launched.

Tembusu Grand was the best-selling project in August, selling 30 units at a median price of S$2,455 per square foot (psf), followed by Hillock Green, which sold 17 units at S$2,108 psf.

The Outside Central Region accounted for nearly 60% of the 208 units sold in August, or 123. The Rest of Central Region sold 31 percent, or 65 units, with the Core Central Region selling the remaining 9 percent, or 20 units.

According to Christine Sun, chief researcher and strategist at OrangeTee Group, Singaporeans accounted for approximately 89 percent of all buyers last month, the highest proportion since March.

Only one non-landed condominium sold for more than S$10 million, as demand for high-end luxury homes remained low, she added. The unit was a 4,198 square foot freehold apartment at 32 Gilstead that sold for approximately S$14.7 million, or S$3,505 psf.

Transaction volume may increase slightly in the coming months, according to Lee Sze Teck, Huttons Asia's senior director of data analytics, with the launch pipeline including 8@BT, Meyer Blue, and Norwood Grand.

Analysts' forecasts have been revised, with the majority estimating 4,500 to 6,000 new homes to be sold by the end of 2024, up from 6,421 units in 2023.

"Till interest rate cuts are announced, translating to lower mortgage instalments in real terms for the buyer, more of the same muted buyer response can be expected for the rest of 2024," said Leonard Tay, head of research at Knight Frank Singapore.

"However, not everything is bleak; there are reasons to be optimistic. Interest rate cuts are now very likely. An interest rate cut or cuts in the remainder of 2024 will provide the psychological stimulus required to tip the decision-making balance for potential homebuyers who are currently undecided," he added.