DEVELOPERS’ sales of new private residential units were robust in July with several big launches on the market. But unexpectedly weak sales at new projects last weekend, combined with slower take-up at launches in the months before, point to sentiment turning as demand pulls back.

A slowdown could put pressure on the 10 or so projects lined up for the rest of the year. Another 2,600 to 3,600 new private homes are slated to be marketed, on top of the roughly 6,000 units already launched from January to July.

Lam Chern Woon, head of research and consulting at Edmund Tie, said: “Price pressures have palpably weakened amid the intensified competition. The deluge of launches in July has led to cautious pricing not just among the newly launched projects, but also across projects which were previously launched.”

Tricia Song, head of research for South-east Asia at CBRE, said: “While July sales had been stellar, sentiment has softened significantly going by how the new launches have done in August.”

The most recently marketed projects met with slow sales. Three projects that opened for bookings in the weekend just past sold only 53 units in total.

Altura EC did relatively much better, moving 220 units of 61 per cent of the executive condominium, while The LakeGarden Residences sold 71 units (23 per cent of the project) at launch.

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Urban Redevelopment Authority data released on Tuesday (Aug 15) showed that in July, developers sold 1,412 units, excluding ECs, more than five times the 278 units sold in June. 

Foreign buying fell further in July, with 23 units sold to foreign buyers, or 1.6 per cent of units sold. This is down from 2.4 per cent in June and 3.7 per cent in May, Edmund Tie’s Lam noted. 

Compared with just 31 in June, some 2,156 units were launched in July, the highest tally since January 2021 when 2,600 units were released for sale, said Christine Sun, OrangeTee & Tie senior vice-president of research and analytics.

Overall take-up of units launched (excluding ECs) stood at 65.5 per cent in July, lower than the 70-80 per cent take-up seen in the first half of the year. Year on year, the number of units sold last month was 68.9 per cent up from the 836 units sold in July 2022. 

Developers sold 59 new EC units in July, from 19 units in June, said Wong Siew Ying, PropNex Realty head of research and content. EC sales are set to increase in August, with the recent launch of Altura EC. 

OrangeTee’s Sun said: “Developers brought forward their sales launches ahead of the lunar seventh month, which is deemed by some buyers to be an inauspicious period to purchase a big-ticket item.”

Four major projects were marketed in July – Grand Dunman, Lentor Hills Residences, Pinetree Hill and The Myst. Together, they accounted for 82.1 per cent of the month’s sales.

A mega development in District 15, the 1,008-unit Grand Dunman moved 549 units or 54.5 per cent of its entire project in July. Lentor Hills Residences in District 26 sold 333 units or 55.7 per cent of its units that month.

Other new projects launched earlier that continued to sell in July included The Continuum, One Pearl Bank and The Reserve Residences.

The bulk of July’s transactions came from the Rest of Central Region (RCR), making up 59.2 per cent of total sales at 836 units sold, excluding ECs. Some 34.6 per cent of sales or 488 units came from the Outside Central Region (OCR), and the remaining 6.2 per cent or 88 units were in the Core Central Region (CCR).

Almost a quarter of units sold in July, or 341 units, were priced below S$1.5 million, said Lee Sze Teck, senior director of data analytics from Huttons Asia. “Developers are keenly aware of keeping the quantum in the sweet spot to attract both first-time buyers and upgraders.”

Market data showed that median prices fell at three new projects – The Continuum, The Reserve Residences and Lentor Modern.

Eugene Lim, ERA key executive officer, said there were only 11 new private housing units sold at S$5 million and above in July. Nine of those were purchased by Singaporeans.

He said: “Foreign buyers have shunned the luxury home segment since the government hiked the Additional Buyer’s Stamp Duty rates for foreign buyers to 60 per cent in late April.”

The most expensive new unit sold in July was a 2,788 square foot leasehold apartment at Canninghill Piers which changed hands for S$8.6 million or S$3,102 per square foot (psf), said Sun.

Analysts expect buyers to be “very cautious” in the months ahead, especially with more projects in the pipeline. 

“We believe the pent-up demand has been mostly absorbed and genuine buyers are now spoilt for choice. In addition, prices have already moved up significantly and investors could feel that there is limited room for upside,” said CBRE’s Song. Projects pitched at investors or foreign buyers would likely face resistance after the April hike in ABSD rates for these groups.

TMW Maxwell, which sold seven of its 324 units over the Aug 11-13 weekend, could have been affected by investors taking a step back from downtown Central Business District properties, said Song. The average price of S$3,310 psf for the units sold at launch is also higher than at One Bernam, the closest comparable new launch.

Two other much smaller projects were launched for sales last weekend. Orchard Sophia sold 19 of its 78 units at S$2,800 psf on average, while The Arden in Choa Chu Kang moved 27 units out of 105 units at an average S$1,750 psf. 

Song said: “The souring macro backdrop, elevated interest rate hikes and cooling measures have slowed demand, though this has become more prominent with the abundant new launches that have come through over the past two months.” 

Lee Nai Jia, head of real estate intelligence, data and software solutions at PropertyGuru Group, said developers would do well to space out the timing of their launches.

Alan Cheong, Savills Singapore’s executive director of research and consultancy, expects upcoming projects to see a 25-35 per cent sell rate in their launch weekend.

“Perhaps market sentiment has crossed a threshold into the negative and we now see an impact on buyers who are deferring their acquisitions,” he said.