New private home sales shrink in August as Ghost Month, weak sentiment keep buyers away
Samuel Oh
DEVELOPERS sold just 394 new private residential units in August, 72.1 per cent lower than July’s sales figures, and also 10 per cent lower year on year.
Including executive condominiums (ECs), developers sold 649 units in August, down from the 1,471 units sold the month before, according to data released by the Urban Redevelopment Authority (URA) on Friday (Sep 15).
August is typically a slow month for property sales, as traditional beliefs about avoiding home purchases in the seventh month in the lunar calendar keep buyers at bay, analysts noted.
Developers also tend to steer clear of launching new projects during the month. Some 590 units were launched in August, 72 per cent lower than in the month before, but more than the 134 units launched in the year-ago period.
Apart from the Ghost Month factor slowing sales, homebuyers have become increasingly reticent, said Leonard Tay, head of research at Knight Frank Singapore.
“Growing concerns weighing on the minds of homebuyers include the current pricing against the increased costs of borrowing, economic uncertainty, and more public housing options in the form of BTO (Build-To-Order) launches in good locations.”
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Developers chalked up the bulk of their new-unit sales in the first half of the month, moving 283 units ahead of the start of the Festival of the Hungry Ghosts on Aug 16.
There were no sales of residential properties priced at S$10 million or more in August. Similarly, no sales of over S$10 million were made in July. In June, however, there were two transactions at Les Maisons Nassim for S$32.7 million and S$30.8 million.
Lee Sze Teck, senior director for data and analytics at Huttons Asia, said that some buyers may have adjusted their budgets, with the much-higher Additional Buyer’s Stamp Duty rates now applying to investment properties and to foreign buyers.
In total, foreigners’ purchases fell to 12 units in August from 19 units in July, according to URA’s Realis data. Half the purchases were in the prime Core Central Region (CCR), with the other half in the Rest of Central Region (RCR) city-fringe locations and suburban Outside Central Region (OCR).
Overall, new home sales for the month were driven by the sole EC launch in 2023. Called Altura, the project in Bukit Batok West Avenue 8 sold 62.5 per cent, or 225 units out of 360 units.
“ECs remain popular for their affordability and investment value,” said Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.
ERA key executive officer Eugene Lim pointed out that developers collectively launched eight new private projects and one EC between July and August 2023, totalling more than 3,000 units. He expects 13 more projects to be launched by the year’s end.
Private home sales dipped in August, with the dearth of major launches in the month. Developers’ sales came mainly from four projects – Orchard Sophia, The Arden, The LakeGarden Residences and TMW Maxwell.
With more new launches on the market, buyers are now more likely to pick carefully through their choices, said Propnex Realty’s head of research and content Wong Siew Ying. “A slew of new projects in District 15, including Grand Dunman, could have rekindled interest for Liv @ MB, while TMW Maxwell could have channelled attention to One Bernam,” she said.
According to caveats lodged, Liv @ MB sold 13 units in July and 12 in August, the only months when the project recorded double-digit sales since May 2022, when 224 units were sold at the project’s launch. One Berman’s 13 transactions in August was the highest in six months.
Close to half of August’s sales (48.7 per cent or 192 units) were transacted in the OCR. This was followed by the RCR at 26.9 per cent (106 units) and the CCR at 24.4 per cent (96 units).
For the year to August, new home sales currently stand at 5,189 units, down 5.6 per cent from the total sold in the year-ago period, said Tricia Song, CBRE head of research, Singapore and South-east Asia.
New launches in the pipeline include Marina View Residences (with more than 700 units), suburban project Hillock Green, and J’Den, the redevelopment of JCube mall.
Song expects 6,500 to 7,000 new private homes to be sold this year, compared with last year’s 7,099 units, a tally which was “already a 14-year low since 2008’s 4,264 units”.
CBRE believes home prices, up 3.1 per cent in the first half of 2023, have peaked and are likely to flatten out in the next few quarters. “Barring widespread retrenchments and a sustained recession, a significant price correction is not expected, given low unsold inventory and generally healthy household balance sheets.”
Song’s forecast for 2023 is for 3 per cent growth in private home prices, slower than the 8.6 per cent in 2022, due mainly to a weaker economic outlook. Official government forecasts are for 0.5 per cent to 1.5 per cent growth in gross domestic product, versus the 3.6 per cent recorded for 2022.
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