New-home sales in July dive nearly 60% year on year in softer property market
NEW private home sales plunged by nearly 60 per cent year on year in July, as homebuyers remained selective and cautious amid a slowing property market.
Based on data released by the Urban Redevelopment Authority (URA) on Thursday (Aug 15), developers sold 571 private homes in July, down 59.6 per cent from the 1,413 units moved a year ago.
The latest sales figure – which excludes executive condominiums (ECs) – is the lowest recorded in the month of July since 2014, when 511 homes changed hands. It is also way below the average of around 1,280 units sold in that month in the past decade.
Tricia Song, CBRE head of research for South-east Asia, attributed the low sales figure to homebuyers’ hesitance, which has persisted in light of weak economic conditions and high interest rates.
Homebuyers have also become selective and price-conscious, seeking out opportunities with the best value propositions, no thanks to peaking home prices and cautious market sentiment, said Wong Siew Ying, head of research and content at PropNex.
“Given the ample… new launches to come, many prospective buyers are also in no hurry to commit, preferring to wait for new projects,” she added.
This impasse between buyers and developers has resulted in take-up rates hovering between 20 and 30 per cent in the primary market, pointed out Knight Frank research head Leonard Tay.
This is a far cry from previous years, which had take-up rates of 60 to 70 per cent, or greater.
Still, the 571 transactions in July was more than double the 228 units sold in June.
Including ECs, 608 units were sold in July with 616 units launched, versus the 1,472 units sold and 2,156 units launched in the same month in 2023. In comparison, 278 units were sold and 118 units were launched in June 2024.
The top-selling project for the month was the newly launched Kassia condominium in District 17, with 154 transactions – 55.8 per cent of its 276 units – at a median price of S$2,049 per square foot.
About 87 per cent of these transactions were made at less than S$1.5 million, noted Marcus Chu, chief executive at ERA Singapore. “This… is revealing of a growing buyer preference for new private homes with a more digestible quantum,” he said.
Lee Sze Teck, Huttons Asia senior director of data analytics, also pointed out that Kassia was especially attractive to homebuyers as the first major freehold condominium launched in the suburbs since 2021.
On the developers’ side, Mogul.sg’s chief research officer Nicholas Mak said many are focusing their efforts on clearing their remaining stock before launching new projects.
Developers have therefore raised sales commissions and cash incentives by 50 to 100 basis points to “encourage property agents to push the sales”, said Mak.
“Currently, the sales commissions of some residential projects can range from 2.5 per cent to as high as 5 per cent for a project with a handful of unsold units.”
Looking ahead, analysts expect private home demand to remain relatively soft in the current macroeconomic climate.
Tay of Knight Frank predicted that the sales volume for 2024 will range between 4,000 and 6,000 units, revised down from his initial projection of 7,000 to 9,000 transactions.
“However, there is reason to be hopeful,” he said. “Compared to any other time this year, the likelihood of interest rate cuts is now more certain than ever.”
This will push homebuyers who are sitting on the fence towards making a purchase, he added.
Likewise, CBRE’s Song expects 5,500 to 6,500 new homes to be sold this year. “Attractive developer pricing remains key to healthy new launch performance,” she said.
Private home prices are likely to stabilise, rising up to 4 per cent this year, she added.
“A significant correction is not expected given the still-low unemployment rate, resilient household balance sheets, and low unsold inventory. Barring a major economic shock, the healthy public housing market could continue to support the (suburban and city fringe) private markets.”
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