New home sales in 2023 will be the lowest since 15 years because of December’s downtime
Around 7,000 to 8, 000 new private homes are expected to be sold by 2024. This is an increase over the 6,452 new home sales in 2023. However, this figure is still lower than the average for the last five years of new developer sales, which was 9,763 units.
It was not surprising that sales fell last year, as developers resisted launching new projects in response to successive cooling measures on the market and a weakening buying sentiment.
New home sales for December were the lowest they’ve been in 15 months, and the total year is now at its weakest level since 2008.
The average take-up rate of new projects (of at least 100 units) during the first 30 days after launch, also slowed down from 64 percent in 2021 and 72 percent in 2022 to 55 percent in 2023.
Foreigners made 235 estimated purchases from January to May of 2023. Lee said that this dropped to just 80 transactions between June and December 2023. According to him, the increased ABSD for foreigners has taken a large chunk out of demand. Foreign buyers’ additional stamp duty on residential properties has been doubled to 60% from 30% at the end of April.
December’s sales are 83 percent lower than 784 units that were sold in November of 2023 and 21 percent lower than the 170 unit sold the month before.
Due to the seasonal slowdown at the end of the year, and the fact that no new projects were launched in the month, new home sales dropped to their lowest levels since January 2009 (108 units).
Analysts estimated that 6,452 new houses would be sold during 2023. That is about 9.1% less than the 7,099 homes sold in 2022. It’s also half the number of units sold by developers in the year 2021.
In 2008, there were 4,264 new houses sold.
Sales declines in the past year can be attributed to several factors. These include property cooling measures that were implemented in April 2023.
Experts found the numbers encouraging considering that in April 2023 stamp duties would be increased for all buyers with the exception of Singaporeans purchasing their first home.
The Continuum was the best-selling project in RCR’s city fringes, with 17 units sold at a price median of S$2,775 psf, and The Landmark, which had 13 units that changed hands for S$2,853 psf.
The Myst sold nine units with a median selling price of S$2,199/sqft and J’den had seven units that sold for S$2,577/sqft.
Midtown Modern and Watten House are the two best-selling CCR Projects in December 2023. They each sold six units for a median of S$2,882 and S$3,258 respectively.
In the year total, RCR sales accounted for 47.1 percent of all new home sales. The OCR sold 1,953 (30.3%) units, and the CCR sold 1,459 (22.6%) units.
The RCR’s total new-sales volume in 2023 increased by 11.3 percent year over year. However, those of the OCR, CCR, and CCR decreased by 21 and 23 percent, respectively.
The number of new projects sold in December in the Outside Central Region, Rest of Central Region, and Core Central Region was 45 and 66 respectively. That is higher than 24 units in Core Central Region.
In 2023, approximately 32.4 percent of all new homes will be sold between S$1.5M and S$2M, with 20.8 percent in the S$2M and S$2.5M range. The remaining 18.2 percent are priced within S$1M and S$1.5M.
Even in 2024 the vast majority of home sales will be for homes priced up to S$2.5million.
Foreign demand for property remained low. The number of foreign buyers was four, representing 3 per cent, or 14 caveats, in the month.
For the whole year, the percentage of new homes purchased by non-permanent residents (foreigners) dropped from 7,1 per cent to 5 per cent.
If interest rates decrease and the economy improves, sentiment could improve in H2 of 2024.
Around 3,300 apartments across 13 projects are expected to be available for sale during the first quarter.
Urban Redevelopment Authority data released on Monday (15 January) shows that 135 condominiums were sold by developers in December 2023.
URA Realis data shows that in December 2023, two non-landed homes at Watten House were sold for more than S$10million. Six other properties were sold for less than S$5million.
HDB flats are selling at a lower price than their original value, which may reduce the demand from HDB upgraders to buy private housing.
The demand for upgraded private housing would be limited by lower budgets and less liquidity, according to him.
According to industry experts, around 10,000 new units will hit the market this year from 20 new projects that have been awarded by government land sales sites. URA statistics showed that 7,911 (including ECs), new units were launched by the URA last year.
Around 7,000 to 8, 000 new private homes are expected to be sold by 2024. This is an increase over the 6,452 new home sales in 2023. However, this figure is still lower than the average for the last five years of new developer sales, which was 9,763 units.
