The lowest number of new homes sold in January since 15 years is a sign that developers are having a slow year.
Lumina Grand EC, in the OCR was the most popular project in January. 271 units were sold at a median S$1,525 a square foot (psf). The new price set a benchmark for EC project prices. Other EC development projects may also have seen a boost in sales as their prices now seem more competitive.
URA Realis reported that 19 units were sold in North Gaia EC, Yishun last month at a price of S$1,306 psf. Altura EC at Bukit Batok also sold some 14 new units for a median price S$1,500 psf.
In January, there were 929 new units and 588 sold units. Comparatively only 152 were sold in December and 36 were launched.
In the meantime, the number unsold housing units rose from 6,246 units at December 2023 up to 7,936 (excluding ECs). This is concerning as it could indicate a moderately low demand for homes this year.
The three launches that contributed to the January supply surge were the 172 unit freehold condo The Arcady in Boon Keng and the 341 unit 99-year leasehold Hillhaven located in the Hillview district, as well as the 512 unit Lumina Grand EC at Bukit Batok.
The Arcady in Boon Keng and Hillhaven have sold-through rates of less than 30 percent.
Nearly 73 per cent of all new home sales fell between S$1million and S$2.5million. 21.9% of all new home sales were between S$2.5M and S$4M, with the remainder being S$4M or more.
The primary market’s overall take-up rate was low in January. In January, approximately 63 per cent (or 63 new units) were sold. This contrasts with 2022 where the number of units sold was greater than the number of units launched.
Many prospective buyers may be waiting for more clarity in the market after a somewhat uncertain year of 2023.
While foreign buyers and investors will be deterred by higher additional buyer’s stamp duty rates, the market as it is now continues to show traction. The local buyer is driving the buying momentum, looking to buy a home that they can live in. The 12,000 or more units slated for launch this year will offer a variety of options, but buyers are likely to pay attention to specific features and prices.
The Arcady in Boon Keng and Hillhaven sold more than 90% units below the S$3 million mark, which shows buyers were cautious with their purchases.
Sales of non-landed units were led by the Outside Central Region in January. This region accounted for over 51,2 per cent. Rest of Central Region was responsible for 39.9% of the new sales, while Core Central Region only accounted 8.9%.
The demand for ECs remains stable because of their limited availability, affordability, and investment potential.
The private home sales market may pick up more in March after more projects have been put on the marketplace.
The macroeconomic outlook also improved during the final quarter of 2023. The first signs of possible interest rates cuts during the year may be just what is needed to bring homebuyers back into the market. The employment level remains healthy, and the overall wealth has not been affected by 2023’s tepid economic growth.
The developers expect to sell between 7,000 and 8,000 new houses this year.
Singapore saw a double-digit increase in new private home sales last month, following the end of year holiday lull. Analysts did note that the volume of sales was low. Sales were at their lowest levels in 15 years, as buyers held back.
The Urban Redevelopment Authority released data on Thursday, February 15, showing that 281 private houses were sold in January. That’s an increase of 108.1 percent from the 135 homes moved the month prior.
The sales of executive condominiums in January 2023 were 28,5% less than in January 2019.
Lee Sze Teck said Huttons’ senior director of data analysis, Lee Sze Teck that it is the lowest January sales in 2009, when developers had sold 108 units. This reflects the uncertain sentiment among buyers.
