Developer sales drop 44.9 percent in September, smaller projects are launched in Ghost Month
In September, including ECs 335 units have been sold and 68 units launched. In August, 649 units had been sold and 950 launched.
The rising geopolitical tensions around the world and the possible effects of the conflict in the Middle East may also dampen the mood in the market for real estate.
One new project was launched in September the leasehold of 999 years The Shorefront at Jalan Loyang Besar in the Outside Central Region (OCR) and had three units sold with a median value of S$1,902 psf.
The number of private home sales decreased in September because of the lack of new projects launched during the ill-lucky Hungry Ghost Festival.
It’s not too surprising that home sales fell following the Hungry Ghost Festival, which ended in mid-September.
The sales of property in the OCR fell by 64 percent month over month, to 70 units. In the Rest of Central Region, it dropped 33 percent from month to month.
Due to the vast array of products available on the market, consumers are becoming more selective when it comes to their choices.
In addition buyers’ mood remained “cloudy and somewhat cool”, thanks partly to the cool measures that were rolled out in April.
In the days leading up to the festival, old beliefs lead some people to avoid home purchases. Developers also tend to avoid launching new ventures during this period.
The latest sales report for September that excludes executive condominiums (ECs) are just a quarter of 987 units sold in the same month of 2022. This is the lowest monthly sales figure in the entire year and the lowest since December 2022, in which developers sold 170 units the previous month.
The number of homes sold in 2023 are expected to be 5,407 homes, which is 15,6% less than the 6,409 homes that were sold during the same time period the previous year. The figure for the nine months is the lowest since 2016, when 5,656 units were sold.
The increased Additional Buyer Stamp Duty (ABSD) as well as the widespread inflation and economic uncertainty, and the growing variety of housing options that are public like Build-to-Order, for instance, are all factors that buyers are weighing against.
The major projects on the horizon will mostly be concentrated within the OCR. The 265-unit Lentoria and the 474-unit Hillock Green are both part of the new Lentor Hills Estate. In Jurong, the J’den Condo, which is located in the former JCube Mall, will feature 368 units. The 440-unit Sora condominium, located at Yuan Ching Road, will also be constructed. The 341-unit Hillhaven at Hillview Rise.
Market watchers are predicting that the number of private home sales without ECs and ECs, will be between 6,000 and 7,000 this year – a tad less than the 7,099 homes sold last year.
The freehold Pullman Residences Newton came in the second-highest, having 21 units sold for a median price of S$3,258 psf. Core Central Region (CCR), out of the three segments was “relatively” better than other segments. The 76 units that CCR sold comprised 35 percent of private and condominium sales during September.
Looking ahead, analysts expect developers’ sales to be subdued, and buyers’ sentiment to remain tense amid increasing macroeconomic uncertainty as well as rising interest rates.
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The sole bright spot was the EC market with an increase of 118 units in the this month. The demand for ECs has been strong, since buyers with a tight budget are looking for the next best alternative to a private home. EC buyers are also eligible to get ABSD upfront remission.
According to the data published on Monday (16th October) by the Urban Redevelopment Authority, developers sold 217 homes for sale in September. This is a drop of 44.9 percent compared to the 394 units that were removed in August.
Altura Bukit Batok was the only EC project to be that was launched in the year 2000. Altura’s total sales topped 88 percent. Altura was also ranked as the top-selling project in September, with units selling at a median of S$1,473 psf.
Developers could decide to hold off launches until 2024, when rates will stabilize and sentiment increases, due to weaker sentiment and still high interest rates and because of the Christmas holiday season.
Altura also set the benchmark price for the EC market in the last month, with the sale of a unit measuring 980 square feet for S$1.6m or S$1,585 psf. This is higher than the previous psf price record set by Copen Grand, which stood at S$1,499 psf.
Developers will need to be cautious about pricing these forthcoming launch dates to ensure the volume of sales. However, there will not significant price reductions since developers had committed to earlier capital expenditures.