SINGAPORE: A dearth of major new launches sent developers’ sales slumping to the lowest tally for May since 2008, but activity may pick up after the June holidays as a number of high-profile new launches are expected to hit the market in the third quarter.
Developers sold 221 new units, excluding executive condos (ECs), in May, down 26.6% from 301 units moved in April, and down 78.7% from 1,039 units a year ago. Including ECs, new home sales fell 25.9% to 261 units in May from 352 units in April.
With no major launches expected in June, developers’ sales are likely to be tepid in the second quarter, and could underperform the 1,164 new units sold in the first quarter this year, and the 2,127 new units moved in the second quarter of 2023, real estate agency PropNex said.
Just 248 new private homes were launched in May, including the 190-unit Skywaters Residences in Tanjong Pagar, the 21-unit Jansen House in Jansen Road and the 16-unit Straits at Joo Chiat in Joo Chiat Place, down from 278 in April. A year ago, 1,595 new units were launched.
Analysts say developers may have held back on launches in view of higher-for-longer interest rates and buyers remaining selective amid more choices and high price points.
“Amid the lack of major new launches, the top 10 best-performing projects in May came from existing projects in the suburbs and the city fringes, including two EC launches. This indicates that buyers have turned very price-sensitive amid economic weakness and high mortgage rates,” said Tricia Song, CBRE’s head of research for Singapore and South-East Asia.
New home sales hit a 15-year low at 6,421 units in 2023, down 9.6% from 7,099 units sold in 2022, following several rounds of cooling measures, softening economic conditions and elevated interest rates.
“The market situation appears to have worsened in 2024, with January-to-May sales at 1,686 units, 47.1% lower from 3,185 units transacted” in the same year-ago period, Song said.
Noting the lower take-up rates across new project launches in 2024, she added that homebuyers’ tentative stance will likely persist, barring an economic rebound and interest rate cuts.
Knight Frank research head Leonard Tay noted that the market is in a quiet phase “after the completion of almost 20,000 units in 2023, together with interest rates that look to be higher for longer throughout most of 2024. Homebuyers are more selective, no longer showing fear-of-missing-out behaviour at show flats”.
The 598-unit Lentor Hills Residences, which is the top performer in May, sold another 25 units at a median price of S$2,164 per sq ft (psf), followed by the 341-unit Hillhaven, which sold 23 units at a median price of S$2,099psf.
“Other than the 533-unit Lentor Mansion launched in March, the new projects that followed have been much smaller. It is likely that many homebuyers are waiting for more projects to be launched,” PropNex head of research and content Wong Siew Ying said.
“Skywaters Residences, being a high-end project in the city centre, is probably above the budget of the majority of homebuyers,” she added.
The Tanjong Pagar luxury project snagged the sole priciest transaction in May – a 7,761sq ft leasehold unit sold for S$47.3mil or S$6,100psf – the sixth priciest new non-landed private-home sale since 1995, said Christine Sun, chief researcher and strategist at property firm OrangeTee Group. The previous record was a S$45mil sale of a freehold unit at Les Maisons Nassim in May 2023.
Wong believes sales could pick up in the third quarter, although some developers may avoid launching projects during the Hungry Ghost Festival period from Aug 4 to Sept 2.
Major suburban launches in July include the 440-unit Sora in Jurong East, priced at S$2,180psf on average; and the 276-unit Kassia in Flora Drive. Prices for the leasehold Sora, whose preview begins on June 22, will start at S$1,850psf, developers SingHaiyi and TK 189 Development said on June 18. — The Straits Times/ANN