SINGAPORE: New private home sales in Singapore hit a 16-year low in August. Developers launched fewer new homes during the Hungry Ghost month, and high prices, along with rising interest rates and uncertain economic conditions, kept many price-conscious buyers away.
However, according to The Straits Times, analysts suggest that sentiment could shift positively with a potential interest rate cut by the US Federal Open Market Committee (FOMC) during its meeting on Sept 18.
Reducing rates could ease borrowing costs, which, combined with a still-low unemployment rate, resilient household balance sheets, and low unsold inventory, might stimulate the housing market.
According to data from the Urban Redevelopment Authority, developers released only 272 new homes in August, down from 616 in July. Sales fell to 208 units, excluding executive condominium (EC) units, a 63.5% drop from the previous month and 47% lower than August 2023.
So far this year, 2,668 new homes have been sold, 48.6% less than last year’s 5,190 units.
According to CBRE, the first half of 2024 saw the lowest sales since the global financial crisis, with 1,889 units sold, below the second half of 2008’s 1,997 units.
Chia Siew Chuin, JLL’s head of residential research for Singapore, said the increase in unsold units highlights a slowdown in new home sales.
The number of unsold homes also increased by 2.7% in August from July, showing slower sales. The total of new unsold private homes rose to 3,595 units in August, a 6.8% increase since December 2023.
Despite these challenges, Ms Chia noted that the resale market is relatively active, with 1,076 caveats recorded in August, close to last year’s 1,069 but 13.9% lower than July’s 1,249.
Knight Frank research head Leonard Tay said that the monthly average of new home sales for 2024 is 338 units, down from previous years. For comparison, the monthly averages were 556 units in 2023, 616 units in 2022, and 1,114 units in 2021.
According to analysts, several new projects launching in September, like the 158-unit 8@BT, Meyer Blue, and Union Square Residences, could boost sales volumes.
The suburbs are performing well, and areas like Lentor continue to attract interest. In August, suburbs made up 59% of new home sales, even though sales fell by 72.3% from July to 123 units, according to JLL.
Meanwhile, projects in Lentor, such as Hillock Green, Lentoria, and Hillhaven, accounted for 37.4% of these sales.
Tricia Song, CBRE’s head of research for Southeast Asia, said that with the HDB resale price index rising to 2.3% in the second quarter of 2024, up from 1.8% in the first quarter, demand from upgraders should continue to support the suburban and city-fringe markets.
In August, the EC market saw 36 new units sold, down by 2.7% from July’s 37 units. North Gaia in Yishun accounted for 24 of these sales, with a median price of S$1,306 per sq ft, according to PropNex.
Wong Siew Ying, PropNex head of research and content, noted that there are currently around 200 unsold new EC units. This tight supply is expected to benefit the upcoming 504-unit Novo Place EC in Plantation Close, Tengah.
Due to new project launches, Christine Sun from OrangeTee Group expects more sales in the second half of 2024. Compared to the 1,938 units launched in the first half, new projects like Emerald of Katong (847 units) and The Chuan Park (916 units) will add over 1,700 units.
Other projects expected later this year include Nava Grove at Pine Grove (552 units), Norwood Grand in Champions Way, and Novo Place EC.
With a possible interest rate cut, new projects launching, and if economic conditions become more favourable, experts believe home sales could improve later this year. /TISG
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