Sales of developers drop 44.9 percent in September, less projects were launched during Ghost Month
The September sales figures that excludes executive condominiums (ECs), is less than one-quarter of the 987 units that were sold in the same period in 2022. It is also the month that has the lowest sales recorded in the past year as well as since December 2022, where developers sold 170 units as noted by Huttons data analytics senior director Lee Sze Teck.
It’s not too surprising that home sales fell following the Hungry Ghost Festival, which ended in mid-September.
ECs were the only positive, with 118 units sold in the month of June. The demand for ECs has been high as price-sensitive buyers seek the best alternative to buying a home. EC buyers are also eligible for ABSD upfront reduction.
Pullman Residences is a freehold development located in Newton, ranked second with 21 units at an average of S$3,258 for each square foot. Core Central Region (CCR) Out of the three segments, performed “relatively” better than other segments. The 76 units that CCR sold comprised 35 percent of private and condo sales during September.
With ECs In total, 335 units sold in September, and launched 68 units. For comparison, 649 units were sold and the launch of 950 units in August.
Private home sales declined in September, weighed down by a lack of new projects being launched during the gloomy Hungry Ghost Festival.
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Altura Bukit Batok was the only EC project to be that was launched in the year 2000. The overall sales of the project reached the 88 percent mark. Altura was also the best-selling project for the second consecutive month, with units sold at a median price of S$1,473 per square foot (psf) in September.
The developers will have to be very careful when determining the price of these new projects in order to guarantee sales volume. There won’t be any significant price reductions as the developers are already made commitments to capital expenses.
The cooling measures implemented in April contributed to “cloudy” and “slightly cool” buyers’ mood.
Furthermore, the growing geopolitical tensions in the world and the potential fallout from the new war in the Middle East could further dampen sentiments in the real estate market.
The buyers have also become more selective in their selections due to the abundance of choices on the market.
According to data published by the Urban Redevelopment Authority (URA) on Monday (Oct 16) the developers sold 217 private homes in September, down 44.9 percent from 394 units sold in August.
Certain buyers do not purchase homes during the holiday due to the traditional belief. Developers may also avoid the launch of new ventures during this period.
Overall, market watchers predict 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 units that were sold last year.
Altura also set an industry benchmark in the EC market in the last month, through the sale of a unit measuring 980 square feet at S$1.6m or S$1,585 per sq ft. The previous highest price for Copen Grand was S$1,499 for a square foot.
The number of homes sold in the first nine months of 2023 to 5,407 units, which is 15.6 percent less than the 6,409 units sold during the same time the previous year. This is the lowest since 2016 when 5,656 homes were sold.
Buyers are weighing the increased Additional Buyer’s Stamp Duty (ABSD) against borrowing costs as well as widespread inflation, economic uncertainty and ever-growing public housing alternatives in the form of Build-To-Order launch events in desirable locations.
Analysts predict that the next few years is likely to be a slow one for buyers and developers due to the rising rates of interest and uncertainty in macroeconomics.
A single new development was launched in September which was a 999-year leasehold The Shorefront at Jalan Loyang Besar in the Outside Central Region (OCR) that had three units being sold for a median of S$1,902 per square foot.
In the meantime, sales of properties in the OCR dropped 64 percent month over month, up to 70 units. In the Rest of Central Region, it dropped by 33 per cent between the months.
Amid weaker sentiment, still-high interest rates and the approaching December holiday season, some developers may decide to extend their releases into 2024 once the interest rate is lower and the mood improves.
The OCR will be the focus of many major launches within the next few months. These projects include the 265-unit Lentoria and the 474-unit Hillock Green in the new Lentor Hills estate. In Jurong, the J’den Condo, which is located in the site of the former JCube Mall, will feature 368 units. The 440-unit Sora condo, which is located on Yuan Ching Road, will also be built. The 341-unit Hillhaven at Hillview Rise.