NEW private home sales in Singapore continued to decline in February as developers held back launches during the Chinese New Year (CNY) festivities.

However, analysts say a more “accurate reflection” of buying sentiment should emerge in March as some major launches roll out. 

According to data released by the Urban Redevelopment Authority (URA) on Friday (Mar 15), developers sold 149 private homes in February, 47 per cent fewer than the 281 units moved in January. 

The figure for the month, excluding executive condominiums (ECs), is around a third of the 433 units sold in February 2023. 

It is also the lowest sales figure for February since 2008, when developers sold 174 units, noted Christine Sun, OrangeTee Group’s chief researcher and strategist. 

Including ECs, 183 units were sold in February. In comparison, 929 units were launched in January, and 588 units sold.

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Lee Sze Teck, Huttons senior director of data analytics, attributed the drop mainly to the lack of launches of major non-landed developments during the month. Developers launched just 45 units, down nearly 10 times from the previous month’s 417 units. 

Lee suggested that because “quite a number” of buyers typically travel during the CNY period, making it “not ideal” for a project launch. 

This is also vastly different from previous property booms, which saw developers rushing to launch their residential projects a week or two after CNY, said Nicholas Mak, Mogul.sg chief research officer. “The absence of new launches last month shows that developers would rather wait and watch for the most opportune time to release their new developments.” 

The tepid sales momentum in the year thus far tracks with previous years, added Tricia Song, CBRE head of research for South-east Asia. 

New home sales had hit a 15-year low of 6,421 units in 2023, down 9.6 per cent from 2022’s 7,099 units. This came on the back of “repeated rounds of cooling measures, a softening economic backdrop and elevated interest rates”, said Song. Buyers are therefore more selective now amid a “myriad of new launch options, buyer fatigue and increasing resistance of high price points”. 

Song also noted that since there were no launches in February, most sales were from previously launched projects. These include the 512-unit Lumina Grand EC in Bukit Batok, which launched in January. The development was the best-selling project in February, with 16 units sold at a median price of S$1,497 per square feet (psf). 

Excluding ECs, the top-selling project was the 386-unit The Botany at Dairy Farm with 15 units sold at a median price of S$2,018 psf. 

Locals accounted for the bulk of transactions – with 14 units moved – and the other was purchased by a Singapore permanent resident, said Mohan Sandrasegeran, SRI research and data analytics head. 

Notably, there were just three new homes purchased by foreign buyers in February, said ERA key executive officer Eugene Lim. This marks the lowest number of foreign homebuyers in a month since the Additional Buyer’s Stamp Duty (ABSD) rate was doubled to 60 per cent for them, he said. 

“Despite having to fork out the hefty 60 per cent ABSD, these buyers still see value in their purchases,” said Lim. “The 3,035 square foot unit at Terra Hill in the Rest of Central Region (RCR) sold for S$8.05 million, implying that the buyer had to pay S$4 million in ABSD.”

URA’s data also indicated that condo and private apartment sales were fairly even across the three market segments last month.

The Outside Central Region (OCR) and city fringe RCR both sold 58 units, accounting for 38.9 per cent of sales each. Some 33 units were sold in the Core Central Region (CCR), making up 22.1 per cent of new sales. 

PropNex research head Wong Siew Ying highlighted that median unit prices across all three regions dipped in February. 

In the prime CCR, the median price declined by 3 per cent, mainly due to “thin sales volume” and a higher base the month before, Wong said. Prices slipped 0.5 per cent in the RCR and 1 per cent in the OCR in February. 

Although sales have been tepid thus far, analysts reckon that momentum will recover in March with the launch of a few major projects.

These include two in the Lentor Hills estate – the 533-unit Lentor Mansion and the 267-unit Lentoria. 

Lentoria sold 50 units during its launch weekend earlier in March, which should support sales volume in the primary market, said Wong. “Meanwhile, Lentor Mansion, which is due to be launched for sales booking on Mar 16, has drawn positive interest during its preview and it is expected to enjoy favourable response from buyers.” 

“The market performance in March may provide a more accurate reflection of buyer sentiment when compared to February, since the latter is a shorter month with a lack of new launches,” added OrangeTee’s Sun. 

Overall, Song of CBRE predicts that 7,000 to 8,000 new homes could be sold in 2024. While this is an improvement from the previous year’s 6,421 units, it is still below the five-year average of 9,288 units, she said.

“In the near term, downbeat macroeconomic conditions, cooling measures and elevated interest rates are likely to continue to weigh on the private residential market but sentiment could improve in H2 2024 if interest rates ease and the economy recovers.”