Developers have a slow start to the year with January’s lowest new home sales since 15 years.

Singapore’s private home sales doubled in the month of December after the holiday slump. Analysts noted, however, that sales were low and at their lowest level in 15 year as buyers held off.

Data released by the Urban Redevelopment Authority on Thursday (15th February) shows that developers sold 281 private homes during January. This is an increase of 108.1% from the previous month’s 135 units.

The January 2019 sales figures, excluding executive condominiums (ECs), are 28.5% lower than the 393 units that were sold in the same period in 2023.

Lee Sze Teck is Huttons Senior Director of Data Analytics and said that the sales are also the lowest since 2009 when developers sold 108 apartments, a reflection of the cautious sentiment among buyers.

In January, 929 units (including ECs) were launched and 588 units sold. Comparatively, only 152 units and 36 new units were launched in December.

The number of unsold private housing units (excluding ECs) has risen to 7,936 units last month, up from 6,246 in December 2023. This could be a cause for concern, as the demand for home purchases this year may be weak.

Three launches in January contributed to the supply increase – The Arcady, a 172-unit condo freehold at Boon Keng; the 99-year leasehold Hillhaven, a 341-unit condominium in the Hillview region, and the 512-unit Lumina Grand EC, located in Bukit Batok.

The Arcady and Hillhaven at Boon Keng had sell-through rates below 30%.

A majority of home sales, 73 percent, were in the range between S$1,000,000 and S$2,500,000. The majority of new home sales – almost 73 per cent – fell within the price range between S$1 million and less than S$2.5 millions.

In general, the primary market took up a low percentage of new units in January. Around 63 percent of the new units introduced in January were sold. This is a stark contrast to 2022, when the numbers of units sold often exceeded the units launched.

After a year that was relatively unsettling in 2023, it is possible that some prospective buyers will wait for more clarity.

While higher rates of Additional Buyers’ Stamp Duty will continue to discourage foreign investors and buyers, the current market is still showing traction. Local buyers are driving the market, as they want to buy a house for themselves. She added that buyers would be more sensitive to price and attributes if they had a wide range of choices among the approximately 12,000 units that will be launched in this year.

The Arcady, Hillhaven and more than 90% of all units sold fell below the S$3m threshold. This shows that buyers are cautious in their home purchase.

In January, the Outside Central Region (OCR), which is outside of Central Region, accounted for 51.2% of all non-landed units sold. Rest of Central Region accounted for 39.9%, while Core Central Region accounted for just 8.9% of sales in January.

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Lumina Grand EC was the best-selling project of January, with 271 apartments sold at a price median of S$1,525 psf. This price is a benchmark for future EC developments. The record price may have boosted the sales of other EC projects because their prices were now perceived as more competitive.

URA Realis data showed that last month, 19 new units at North Gaia EC were sold for a median of S$1,306 psf. Altura EC, Bukit Batok sold 14 units at a median of S$1,500 psf. Two new units at Provence Residence EC, Canberra were sold for S$1,473 psf.

Due to the limited availability, affordability and investment potential of ECs, demand for ECs is expected to remain stable.

Sales of private homes may not pick up until March, when more projects come on the market.

The macroeconomic situation also improved in 2023’s last quarter. First signs of interest rate reductions expected in the coming year could be enough to re-energize the homebuyer market. “Employment levels are healthy and overall wealth is unaffected by the slow economy of 2023.”

This year, developers are expected to build 7,000-8,000 new homes.

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