In May, new residential sales of homes fell to their lowest levels since records started in June 2007. The sales fell by more than 80 percent year-on-year.
The sales have been slow in recent months, aggravated by the seasonal slump in mid-year.
The Urban Redevelopment Authority (URA) released data on Tuesday (18 June) showing that developers sold 221 condo units during May. This is down 78.7 percent year-on-year compared to 1,039 condo units sold in the previous year.
The sales figures for May that exclude executive condominiums (ECs) are less than the 26,6 percent of 301 units that were sold in April.
The sales in May are the lowest they have been in the past three months, and also since 2008 when there were 453 units sold.
In May, which includes ECs There was a total of 261 units sold, and 248 units launched in comparison to 1,056 units sold and 1,595 units launched in 2023. In April 2024 352 units were sold, and 278 units were launched.
The sales figures for May 2023 were increased by the introduction of two new developments – The Continuum, a 99-year-leasehold project in District 15, with 816 units and The Reserve Residences (99-year-leasehold) A 732-unit development located in District 21, which has 792 years of leasehold.
In May this year there were no major developments initiated within the suburbs or on the city fringe. These houses are generally cheaper and more accessible than homes in the main segment.
The primary market sales are down substantially, despite the holiday downturn.
Developers have sold an average of 8,853 private housing units each year over the past 10 years. This is an average monthly sales of 738 units. Developers have sold just 1,697 units of housing units during the initial five months of of 2024. This is considerably less than the amount of sales needed to reach an annual average of 8,853 housing units.
Analysts have trimmed their forecasts because of the current slump in sales. Knight Frank had estimated that the primary sales volume would be between 7,000 and 9,000 units in 2024. The estimate has now been lowered to less than 7,000 units.
CBRE has reduced its estimate for sales of new homes to 5,500-6,500 units instead of 7,000-8,500 units. Private prices for residential properties increased by 1.4 percent quarter-on-quarter during Q1, may also increase in a more gradual manner throughout the year.
Mak predicted that sales in the primary market would fall to levels similar to those that were seen in 1998 in the Asian Financial Crisis. In 1998 there were only 6,096 units sold.
The market is expected to remain in check until mortgage rates fall or if the government eases certain cooling measures.
The prices will continue to rise by 3 to 4percent by 2024. With balance sheets of households being robust and inventory levels being low and inventory levels low, there’s no reason to anticipate major changes. A rebound in sales of developers is anticipated to occur in 2025, but only.
Two smaller projects that are freehold, the Straits At Joo Chiat and the 999-year leasehold Jansen home in District 15, both having 21 units, were announced in May. Jansen House sold three units at a median price of S$2,098 per square foot, and Straits At Joo Chiat sold two units with a median price of S$2,091 per square foot.
A 99-year leasehold Skywaters Residence unit was sold to a foreign buyer for S$47.3m or S$6,100 for each square foot in the month of March. The buyer was required to pay S$28.4million in additional stamp duty. Shenton Way has not yet been launched publicly however it was marketed to a select group of customers.
In all, just 15% of the 1,595 units that were sold in the month of May 2023 were sold in May. This is also a little smaller than the 278 units launched in April 2024.
URA information revealed that the suburb Outside Central Region (OCR), that is the third segment of the market was the top choice for private and condo purchase, accounting for 63,8 per percent of sales May.
The remainder of Central Region, or the city fringe made up around 30 percent of principal sales. The Core Central Region, which was responsible for 12.2 percent of the total new sales during the month, came in the third-placed region.
The 10 top projects that did the most well during May were all current projects, mostly located within the OCR or RCR. This indicates that buyers are becoming more price-sensitive due to the recession and rising mortgage interest rates.
The most well-known project in District 26 was the Lentor Hills residence, a 99-year leasehold development. 25 units were offered for a median price of S$2,164 for each square foot.
Lentor was also the one with highest sales in the month of May, with 69 transactions.
We could see an increase of a small amount in the second quarter of the year, as larger projects are introduced to the market. The second quarter of the year is expected to be a little more pronounced in sales as more significant projects are launched.