The weakest new home sales since 15 years in 2023 were due to the December downtime.
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).
The estimated number of new homes sold for 2023 is 6,452. This is about 9.1 per cent less than the 7,099 units sold in the year 2022, and roughly half the amount sold by developers in the year 2021.
Urban Redevelopment Authority data released on Monday (15 January) shows that 135 condominiums were sold by developers in December 2023.
December’s sales are 83 percent lower than 784 units that were sold in November of 2023 and 21 percent lower than 170 unit sold in the same month last year.
In 2008, 4,264 new houses were 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 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.
PropNex’s data in December showed that the best-selling project in the RCR city edge areas was The Continuum. 17 units were sold with a median price S$2,775 psf, and The Landmark had 13 units change 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 dominated the new home market, accounting for 4,71% of all units sold. This was followed by OCR, which had 1,953 (or 30.3%), and CCR, with 1,459 (or 22.6%). The RCR’s total new sales volume in 2023 increased by 11.3 percent compared to the previous year. However, those of the OCR, CCR, and CCR decreased by 21 and 23 percent, respectively.
In 2023, approximately 32.4 percent of all new homes will be sold between S$1.5M and S$2M, and about 20.8 percent within S$2M and S$2.5M range. Meanwhile, 18.2 percent are within S$1M and S$1.5M price range. Even in 2024, the majority of home sales will be for homes priced up to S$2.5m.
Reduced liquidity and smaller budgets
Foreign demand for property remained low. The number of foreign purchases was four, representing 3 per cent, or 14 caveats, in the month. In the period January to May of 2023, foreigners made a total of 235 transactions. The number of foreign transactions plummeted to 80 from June to December e 2023. According to him, the increased ABSD on foreigners has taken a large chunk of the demand off the market. Foreign buyers’ additional stamp duty on residential properties has been doubled to 60% from 30% at the end of April.
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.
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.
The demand for private housing from HDB upgraders could decline in 2024 as HDB flat transactions are now averaging lower cash values.
The demand for upgraded private housing would be limited by lower budgets and less liquidity, according to him.
About 10,000 new units are expected to be released this year from around 20 new projects that will come out of the government land sale sites. URA statistics showed 7,911 new units, including ECs, were launched in 2013.
Analysts expect about 7,000-8,000 new private homes sold in 2024. This represents an increase over the 6,452 units sold in the year 2023. However, this is still lower than the five-year sales average for new developers of 9,763 unit.
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. In December, new home sales fell to the lowest level since 15 years. The year-end total was also at its weakest ever. It was not surprising that sales fell last year, as developers had held off on launching new projects due to market cooling measures.
The average take-up rate of new projects (of a minimum 100 units) during the first 30 days after launch, also slowed down from 64 percent in 2021 to 72 percent in 2022. This figure then dropped to 55 percent in 2023.
