Developers’ February sales are tepid, with a drop of nearly half due to the lack of new condo launches
Each of the Outside Central Regions (OCR) as well as city fringe RCR sold 58 vehicles, or 38.9 percent. The Core Central Region (CCR) sold 33 units, which accounted for 22.1% of the new sales. All three regions saw a decline in median unit prices.
Wong stated that in the prime CCR the median price dropped by 3 percent, mostly due to the low sales volume. The previous month, Wong noted, there was a higher baseline. In February, the RCR prices dropped by 0.5% and the OCR prices fell 1.0%.
While sales have been slow so far, analysts believe that the momentum will improve in March when a few big projects are launched.
There are two of them in the Lentor Hills Estate – Lentor Mansion (533 units) and Lentoria (267 units).
Lentoria has sold 50 units in its first weekend of March. This will support the sales volume on the primary market. Lentor Mansion which will be available for bookings on March 16 has attracted positive interest in its preview. It is expected that buyers will respond positively to it.”
Market performance in February may be more indicative of buyer sentiment than March, as the latter month is shorter and has fewer new launches.
In total, 7,000-8,000 homes could be sold by 2024. Although this is an increase over the 6,421 homes sold the year before, it still falls below the five-year median of 9,288.
In the short-term, the market for private residences will likely continue to suffer from the negative macroeconomic environment, the cooling measures and the high interest rate. But sentiment could improve by H2 2024 as interest rates begin to ease and the economic recovery begins.
New private home sales continued to fall in Singapore in February as developers resisted launching new homes during the Chinese New Year festivities.
Analysts believe that March will be a more accurate time to gauge the mood of buyers as major launches begin.
According to the data released on Friday, 15 March by the Urban Redevelopment Authority(URA), developers moved 149 private homes during February. That’s 47 per cent less than in January when 281 units were sold.
A third of the total 433 units in February 2023 were executive condominiums. The number of units sold in February 2008 was 174.
In February, 183 ECs were sold. In January, 929 new units were introduced, with 588 sold.
The decline is mainly due to the fact that there were no major developments launched in the month. Developers only launched 45 units in August, nearly ten times less than the previous months’ 417 units. The CNY holiday is a time when many people travel, which makes it a bad time for project launches.
The current property boom is also very different from past booms when developers rushed to launch their residential developments a week or so after CNY. The lack of new launches in the last month indicates that developers are waiting for the right time to launch new developments. The year-to-date sales pace is similar to previous years.
The number of new homes sold had fallen to a 15 year low in 2023 (6,421) units. This is a drop of 9.6 per cent compared to the 7 099 units sold in 2022. This was due to repeated cooling measures and a softening economy. Due to the plethora of new product launches, buyer fatigue and increased resistance towards high price points, buyers are now more selective.
Due to the lack of launches in February, sales are mainly from projects already launched. The 512 unit Lumina Grand EC launched in Bukit batok in January. In February, 16 units were sold at an average price of S$1,497/square foot (psf) in the development.
The Botany, a 386 unit project at Dairy Farm that sold 15 units for a median price S$2,018 psf.
Locals made up the majority of transactions, moving 14 units. The other unit was purchased by an Singaporean permanent resident.
Just three new homes have been purchased by overseas buyers in February. This is the lowest number in a year of foreign homebuyers since the Additional Buyer Stamp Duty (ABSD), which was doubled for them to 60%, went into effect.
Buyers still find value in their purchase despite the steep ABSD of 60%. Terra Hill’s 3,035 sq ft unit in RCR sold for S$8.05m, meaning that the buyer paid S$4m in ABSD.
URA’s data showed that condominium and private apartment sales in the last market segment were relatively even.
