Sales of new condos are down almost half this February
New private home sales continued to fall in Singapore in February, as developers resisted launching new homes during the Chinese New Year festivities.
Analysts believe that March will be a better month to gauge the mood of consumers as some major launches are launched.
According to the data released on Friday, 15 March by the Urban Redevelopment Authority(URA), developers moved 149 private homes during February. That’s 47 percent fewer than January when 281 units were sold.
A third of the total 433 units in February 2023 were executive condominiums.
The number of units sold in February 2008 was 174.
In February, 183 ECs were sold. In January, 929 new units were introduced, with 588 sold.
The decline is mainly attributed to the absence of major non landed developments launched during the last month. Developers only launched 45 units in August, down almost 10 times the 417 units of the previous months.
The current property boom is a far cry from previous booms when developers rushed to launch their residential developments a week or so after CNY. The lack of new launches in the last month is a sign that developers are waiting for the right time to launch new developments.
The number of new homes sold had fallen to a 15 year low in 2023 (6,421) units. This is a drop of 9.6% from 2022 (7,099 units). This was due to repeated rounds of cooling, a softer economic backdrop, and higher interest rates. Due to the plethora of new product launches, buyer fatigue and increased resistance towards high price points, buyers are now more selective.
Due to the lack of launches in February, sales are mainly from projects already launched. The 512-unit Lumina Grand EC launched in Bukit batok in January. In February, 16 units were sold at an average price of S$1,497/square foot (psf) in the development.
The Botany, a 386 unit project at Dairy Farm that sold 15 units for a median price S$2,018 psf.
Locals made up the majority of the sales – 14 units were sold – while the remaining unit was purchased by an Singaporean permanent resident.
Just three new homes have been purchased by overseas buyers in February. This is the lowest number in a year of foreign homebuyers since the Additional Buyer Stamp Duty (ABSD), which was doubled for them to 60 percent, went into effect.
Find out more: Lentor Mansion condo
These buyers see the value of their purchases, despite paying a 60 per cent ABSD. Terra Hill’s 3,035 sq ft unit in RCR sold for S$8.05m, meaning that the buyer paid S$4m in ABSD.
URA’s data showed that condominium and private apartment sales in the last market segment were relatively even.
Each of the Outside Central Regions (OCR) as well as city fringe RCR sold 58 vehicles, or 38.9 percent each. Core Central Region (CCR) saw 33 units sold, accounting for 22.1 percent of sales.
In the prime CCR the median price fell by 3%, mainly because of “thin sales volumes” and the higher base from the previous month. In February, the RCR prices dropped by 0.5% and the OCR prices fell by 1.0%.
While sales have been slow so far, analysts believe that the momentum will improve in March as a result of launching a few large projects.
There are two of them in the Lentor Hills Estate – Lentor Mansion (533 units) and Lentoria (267 units).
Lentoria has sold 50 units since its launch on the first weekend in March. This should help to boost sales in the primary markets.
Lentor Mansion is also expected to receive a positive response from buyers. The preview of the Lentor Mansion is scheduled to begin on March 16.
Market performance in February may be more indicative of buyer sentiment than March, as the latter month is shorter and has fewer new product launches.
Analysts estimate that up to 8,000 homes will be sold worldwide by 2024. Although this is a slight improvement over the 6,421 homes sold the year before, it still falls below the five-year median of 9,288.
In the near-term, macroeconomic conditions that are not encouraging, cooling measures and high interest rate will likely continue to affect the residential market. But sentiment could improve by H2 2024 as interest rates begin to ease and the economic recovery begins.