NEW private home sales in December fell to their lowest monthly level in 15 years, taking the year’s total to their weakest since 2008.  

The slump in sales was not unexpected as developers held back on new project launches last year in the aftermath of successive market cooling measures and weak buying sentiment. 

But as Chia Siew Chuin, JLL’s head of residential research, noted, the average take-up rates for new projects (of at least 100 units) within the first month of their launch also slowed from 64 per cent in 2021 and 72 per cent in 2022, to 55 per cent in 2023.

Data from the Urban Redevelopment Authority (URA) on Monday (Jan 15) showed developers sold 135 units in December 2023, excluding executive condominiums (ECs).  

December’s sales were 83 per cent lower than the 784 units sold in November 2023, and 21 per cent lower than the 170 units sold in the year-ago month. 

The seasonal year-end lull, combined with the fact that there were no new projects launched during the month, sent new home sales to their lowest monthly level since January 2009 when 108 units were transacted, said Wong Siew Ying, PropNex’s head of research and content.

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For the whole of 2023, an estimated 6,452 new homes were sold, some 9.1 per cent fewer than the 7,099 sales in 2022 and about half the tally sold by developers in 2021, said Knight Frank’s head of research Leonard Tay. 

Last year’s numbers also marked the lowest new-sales volume recorded in 15 years since 2008, when 4,264 new homes were sold, said JLL’s Chia.

“Last year’s sales decline could be attributed to a combination of factors, including the property cooling measures in April 2023, lack of project launches, macroeconomic uncertainty, and interest rate hikes,” said OrangeTee & Tie’s senior vice-president of research and analytics, Christine Sun.

Lee Sze Teck, Huttons Asia’s senior director for data analytics, saw the year’s tally as “an encouraging set of numbers”, considering that stamp duties were raised in April 2023 for all buyers except for Singaporeans making their first home purchase. 

New projects in the Outside Central Region (OCR) and Rest of Central Region (RCR) saw 45 and 66 transactions for December respectively, higher than the 24 units bought in the Core Central Region (CCR).

PropNex’s data showed in December that the two best-selling projects in the RCR city fringe areas were The Continuum, where 17 units were sold at a median price of S$2,775 per square foot (psf), and The Landmark where 13 units changed hands at S$2,853 psf.

The top-performing suburban OCR projects included The Myst, which sold nine units at a median price of S$2,199 psf, and J’den, with seven units selling at a median price of S$2,577 psf. 

The best-selling CCR projects in December 2023 were Midtown Modern and Watten House, which sold six units each at a median price of S$2,882 psf and S$3,258 psf, respectively.

JLL’s Chia noted that for the full year, the RCR dominated overall new private home sales, accounting for 3,040 units (47.1 per cent) sold, followed by the OCR with 1,953 units (30.3 per cent) and CCR with 1,459 units (22.6 per cent). 

The total new-sales volume registered for the RCR in 2023 was up 11.3 per cent year on year, while those in the OCR and CCR fell by 21 per cent year on year and 23 per cent year on year, respectively.

ERA Singapore’s chief executive officer Marcus Chu said that about 32.4 per cent of the new homes sold in 2023 were priced between S$1.5 million and S$2 million, about 20.8 per cent were within the S$2 million and S$2.5 million range, while 18.2 per cent were within the S$1 million and S$1.5 million price range.

“Buyers remain cautious about the price quantum amid elevated interest rates, and therefore home prices up to S$2.5 million will form the bulk of the transactions, even in 2024,” he said.

Lower liquidity and smaller budgets

Foreign buying demand remained subdued. Huttons’ Lee said there were four properties bought by foreigners during the month, making up 3 per cent of the monthly sales, but higher than the 1.8 per cent or 14 caveats in November.

From January to May 2023, there were an estimated 235 purchases by foreigners. This plunged to 80 transactions from June to December 2023, said Lee. “The higher ABSD on foreigners did take away a substantial chunk of demand from the market,” he said. Additional Buyer’s Stamp Duty payable by foreign buyers of residential property doubled from 30 per cent to 60 per cent from end-April. 

For the full year, the proportion of new private homes bought by foreigners (non-permanent residents) fell from 7.1 per cent in 2022 to 5 per cent in 2023, noted Chia.

URA’s Realis data showed there were two non-landed homes – at Watten House – that transacted for more than S$10 million, while six were sold for at least S$5 million in December 2023, said Sun.

For 2024, Mogul.sg’s chief research officer, Nicholas Mak, said demand from HDB upgraders for private housing may weaken as HDB flat transactions have seen lower cash over valuation.  

Lower liquidity and smaller budgets would limit demand for private housing from upgraders, he added.

Knight Frank’s Tay estimated that some 20 new projects from awarded government land sales sites will be launched this year, bringing about 10,000 new units to the market. URA data showed that 7,911 new units (including ECs) were launched last year. 

CBRE expects about 7,000 to 8,000 new private homes to be sold in 2024, up from the 6,452 units in 2023, but below the five-year average of new developers sales of 9,763 units, said CBRE’s head of research for Singapore and South-east Asia, Tricia Song.

“Sentiment could improve in H2 2024 if interest rates ease and the economy recovers,” she added.

About 3,300 units across 13 projects may be launched for sale in the first quarter, said Huttons’ Lee.