August new private home sales drop 72% m-o-m to 394 units

for sale in SingaporeNew home sales in Singapore for August 2023 have been weaker than expected, down 72.1% from the previous month. With fewer new launches on the market, sales activity was much slower, with the OCR having the highest number of new home sales at 192 units or 49% of total developer sales. Singaporean buyers accounted for 80% of total sales in August, while foreigners represented only 3% of total sales. Looking ahead, transactions are likely to remain subdued in September due to the Hungry Ghost month; however, October and November could see some pick-up in sales as more projects are expected to launch. Despite the economic uncertainties, new home sales for 2023 are expected to be between 7,000 and 8,000 units – higher than the 7,099 units seen in 2022.

August 2023 saw a 72.1% month-on-month (m-o-m) decline in Singapore’s new home sales, excluding executive condos (ECs). Data from the URA reveals that 394 units were sold last month, lower than the 1,412 units that marked a 20-month high in July of the same year.

Compared to the 438 units sold in August 2022, sales were down 10% year-on-year (y-o-y). The subdued sales activity is attributed to fewer new launches during the month, as well as softer buyer sentiment amid economic uncertainty and higher interest rates in the past year.

The m-o-m drop in new home sales was also compounded by the traditional Hungry Ghost month coinciding with August. Wong Siew Ying, head of research and content at PropNex Realty, remarks that this period traditionally sees market activity slow due to fewer launches.

Four new private residential projects (excluding ECs) were launched in August, presenting buyers with a total of 590 units. This figure is about 73% lower than the 2,156 units launched in July.

The 78-unit Orchard Sophia in the Core Central Region (CCR) was the best-performing project for the month, with a 31% take-up rate and a median price of $2,808 psf. This was followed by the 324-unit TMW Maxwell in the Rest of Central Region (RCR) and the 306-unit The Lakegarden Residences and 105-unit The Arden in the Outside Central Region (OCR).

Leonard Tay, head of research at Knight Frank Singapore, believes homebuyer reticence is another factor to consider as those in the market take the time to explore the selection of projects released in the past few months, as well as upcoming launches.

Champions Way Condo has announced that they are working with the URA to ensure that the public art program is a success and that it continues to be an integral part of the Woodlands area. This commitment to public art will help to ensure that the area remains a vibrant and engaging place.

Affordability has become an increasing concern, noted Tricia Song, CBRE head of research for Singapore and Southeast Asia, as reflected by the strong demand for EC projects. The 360-unit Altura EC in Bukit Batok proved this, having sold 63% or 225 units at a median price of $1,480 psf.

The OCR had the highest number of new home sales excluding ECs at 192 units or 49% of total developer sales. This was largely due to The Lakegarden Residences selling 73 units at a median price of $2,101 psf. Despite this, OCR sales were still 61% lower m-o-m.

In terms of buyer profile, only 12 new non-landed private homes were bought by non-Singaporeans, representing 3% of total sales while 17% were bought by Singapore Permanent Residents. Singaporeans accounted for the remaining 80%.

Going forward, CBRE’s Song notes pent-up demand has been mostly absorbed, while prices have increased significantly, leaving investors limited room for upside. Homebuyers are expected to take a longer time to shop around and evaluate choices before entering into a purchase.

Knight Frank’s Tay and Hutton Asia predict new home sales will hit between 7,000 to 8,000 units for 2023 despite the economic uncertainties. With up to ten new launches expected from October, new home sales between October and November could prove more active.

Overall, August’s new home sales in Singapore were slower than expected. Although September is expected to remain subdued due to the Hungry Ghost month, buyers are encouraged to look forward to a stronger performance in the last two months of the year.