New Private Home Sales Fell To A 9-month Low In September 2023 As Market Sentiment Moderates

16 October 2023, Singapore – Developers’ sales remained tepid in September owing to a lack of major launches and the soft market sentiment. New private home sales (ex. executive condos) came in at 217 units, marking a 44.9% decline from the 394 units shifted in August and the second consecutive month of contraction in new sales volume. The only new project launched in September was the 23-unit The Shorefront in Pasir Ris.

September’s sales tally is also the lowest in nine months, since 170 new units were transacted in December 2022. On a year-on-year basis, new private home sales were down by 78% from the 987 units sold in September 2022. In the first nine months of 2023, developers have sold an estimated 5,407 new private homes (ex. EC), compared to the 6,409 units transacted in the corresponding period in 2022.

All three sub-markets posted month-on-month declines in home sales in September, with the Outside Central Region (OCR) seeing the steepest fall of nearly 64% MOM to 70 units. The decrease in OCR new home sales could be attributed to the higher base in August, where a couple of new projects – The Arden and The Lakegarden Residences – lifted sales then. Lentor Hills Residences, which was put on the market in July was the best-selling OCR project in September, transacting 17 units at a median price of $2,231 psf. Meanwhile, newly-launched The Shorefront sold 3 units at a median price of $1,902 psf.

Developers’ sales fell to a six-month low in the Rest of Central Region (RCR), as a dearth of new launches weigh on sales. New home sales were down by 33% MOM to 71 units in September from 106 units sold in August. The top-selling RCR projects in the month included Grand Dunman which sold 16 units at a median price of $2,571 psf, The Reserve Residences which shifted 11 units at a median price of $2,446 psf, and The Continuum which transacted 10 units at a median price of $2,790 psf.

The Core Central Region (CCR) led sales in September with 76 units changing hands – representing a 20.8% MOM decline from August. This also marks the lowest monthly new home sales in the CCR in more than two years, since 58 units were sold in February 2021. The CCR, a proxy for high-end homes continues to face headwinds from the recent cooling measures where the additional buyer’s stamp duty (ABSD) rates for foreigners and investors were hiked to curb investment demand for homes. In addition, the lack of major launches in this sub-market also put a drag on transactions. Pullman Residences Newton was the overall top-selling project in September, transacting 21 units at a median price of $3,258 psf (see Table 3).

In the EC segment, sales moderated from the 255 units sold in August to 118 new EC units in September, with Altura transacting 100 units at a median price of $1,473 psf - accounting for about 85% of the monthly EC sales. As at the end of September, Altura has sold 316 out of its 360 units or nearly 88% of the units available at the EC project. Based on URA’s data, there are just 319 unsold new EC units – mostly in North Gaia - on the market as at end-September.

Developers placed a total of 68 new units (ex. EC) for sale in September – down sharply from the 590 units (ex. EC) launched in the previous month; no new ECs were launched in September. Owing to the traditional Hungry Ghost month which spanned from mid-August to mid-September, developers had held back on putting new projects on the market as this period tends to see slower sales.

Wong Siew Ying, Head of Research & Content, PropNex Realty:
“The lack of major launches, cautious market sentiment, and buyer fatigue continued to stymie new home sales in September, following the relatively muted sales in August. The decline in sales in September was not unexpected given that developers’ sales are supply-driven and that there were no big project launches to prop up transactions in the month. With private home prices peaking and ample unsold units in the market, coupled with the still high interest rates and cautious sentiment, there may be some inertia in the market where buyers are taking time out to review their options.

With 5,407 new private homes (ex. EC) sold in the first nine months of 2023, we now think overall developers’ sales could likely come in at a forecast range of around 6,500 to 7,000 units for the whole of 2023. In 2022, developers sold 7,099 new units (ex. EC). Prior to 2022, the last time we saw annual new home sales at the 7,000-plus unit levels were in 2014 to 2016, where cooling measures implemented in 2013 had dampened housing demand.

According to URA Realis caveat data, the median transacted unit price of non-landed new private homes in the CCR rose by 10.5% MOM to $3,151 psf in September (see Table 1), probably contributed by some project which had a higher median price during the month – such as Midtown Bay, Midtown Modern, Perfect Ten, Leedon Green and Orchard Sophia. The OCR also saw its median price rise by 0.3% MOM to $2,067 psf in September, supported by prices at projects including Lentor Hills Residences, The Myst, The Botany at Dairy Farm, and The Arden. Meanwhile, the RCR saw its median price fall by 2.9% MOM to $2,544 psf, likely owing to the lack of transactions at some projects which had helped to prop up the median price in August (including TMW Maxwell, and One Pearl Bank).

The proportion of new non-landed private home sales (ex. EC) to foreigners (non-PR) rose to 6.2% in September from 2.7% in the previous month (see Table 2), and is the highest proportion since April 2023, when the fresh cooling measures were implemented – the higher proportion is likely due to the low sales volume in September. In absolute terms, there were just 13 transactions to foreigners in September, up slightly from the 10 units in August, but far fewer than the 66 transactions to foreigners in April.

Of the 13 transactions by foreigners in September 2023, 12 of them are located in the CCR, with another in the RCR. Meanwhile, the proportion of new non-landed private homes purchased by Singaporean buyers was a touch higher, rising from 80.7% in August to 81.3% in September. Singapore PRs made up 12.4% of the monthly sales in September – down from 16.6% in the previous month.

In the EC segment, sales continued to track well in September, with Altura EC driving demand when sales opened up for second-timer balloting last month. As prices of new launches remained firm, we expect ECs which are more affordably priced to continue to pare down on their unsold inventory over the rest of the year. Altura is the only EC project launched for sale in 2023, and its neighbouring EC project Lumina Grand EC in Bukit Batok West Avenue 5 could potentially hit the market in Q1 2024. In September, the median price gap between OCR non-landed new private homes and that of new ECs was about 41%.

Looking ahead, we expect new private home sales could stay relatively muted in October due to limited launches, but sales volume could tick up in November as some new projects come on, including J’den in Jurong East, which could garner interest from buyers given its attractive location in the Jurong Lake District, plentiful amenities in the surrounding areas, and proximity to the MRT station.”