SINGAPORE - Two new suburban launches, including a rare freehold project in Pasir Ris, helped fuel a rebound in new private home sales in July, but the monthly sales average so far in 2024 remains muted as more buyers turned resistant to higher home prices and amid delays in interest rate cuts. According to Urban Redevelopment Authority data released on Aug 15, developers sold 571 private homes in July, excluding executive condominiums (ECs), more than double the 228 units sold in June, but about 60 per cent lower than the 1,413 units sold in July 2023. The 571 units sold is still “a decade-low for the month of July, and is below the five-year historical average of 1,223 units for that month,” Ms Tricia Song, CBRE’s head of research for South-east Asia, said.
July’s sales take the year-to-date tally of new homes sold to 2,460 units, down 48.7 per cent from 4,796 units sold between January and July in 2023. Knight Frank research head Leonard Tay noted that from January to July 2024, the monthly average has been “muted at 357 units, compared with the monthly average of 556 in 2023, 616 in 2022 and 1,114 in 2021.
Even in 2020 when movement restrictions were imposed due to the pandemic, the monthly average was 861 units”. Based on quantum size, the largest proportion of new private homes sold in July (excluding ECs) ranged between $1 million and $1.5 million, “a shift away from the $1.
5 million to $2 million range for most months, which could indicate increased buyer price sensitivity”, CBRE’s Ms Song said. The number of new private homes launched jumped more than five times to 616 in July from a month ago, but is down 71.4 per cent from a year ago.
The total units launched in the first seven months of 2024 is estimated at 2,554 units, a 56.3 per cent drop from the same period a year ago. “Although gradually increasing, the still-low level of unsold stock has enabled developers to hold prices firm.
But (rising) unsold stock and ongoing projects have broadened choices for buyers and raised competition among developers,” Ms Chia Siew Chuin, JLL’s head of residential research for Singapore, said. The suburban market was the top performer in July, selling 444 new units during the month – more than three times higher than the 132 units sold in June. Two new launches – the 440-unit Sora in Yuan Ching Road (Jurong East) and 276-unit Kassia in Flora Drive (Pasir Ris) – accounted for about 45 per cent of the month’s new home sales.
PropNex head of research and content Wong Siew Ying cited pent-up demand due to few sizeable launches since the 533-unit Lentor Mansion hit the market in March 2024. Kassia was the top selling condo, with 52 per cent or 154 units moved at a median price of $2,049 per square foot (psf), followed by Sora, which moved 103 units at a median price of $2,152 psf. Benefitting from the buzz at Sora’s launch, The LakeGarden Residences in Jurong sold 41 units at a median price of $2,212 psf.
“July marks the first time in 2024 that we witnessed new homes transacted for $1 million and below. The majority of one-bedders at Kassia fell within this price category, making the launch an attractive entry point for investors looking for freehold properties,” ERA Singapore CEO Marcus Chu said. “Notably, 134 of the 154 units sold transacted for less than $1.
5 million, he added. But CBRE’s Ms Song noted that despite July’s rebound, the lower take-up rates observed across 2024 project launches may push some developers to delay their launches until market conditions stabilise. Analysts say developers’ sales will likely moderate in August due to the Hungry Ghost month, which spans from Aug 4 to Sept 2.
But CBRE believes sales should pick up in September due to major new launches in the city-fringe area, including freehold launch Meyer Blue (226 units), Emerald of Katong (847 units), and 8@BT (158 units) located on the Bukit Timah Link Government Land Sales site near Beauty World. In the suburbs, The Chuan Park (916 units) at Lorong Chuan could also be launched. Despite possible interest rate cuts in September, some analysts do not anticipate a swift market rebound.
“The reduction in interest rates must be significant, such as more than 50 basis points, before it can move the needle in Singapore’s primary home sales,” Mr Nicholas Mak, chief research officer at Mogul.sg, said. “This is because local banks are already offering attractive home loan rates.
There may not be much room for the banks to cut home mortgage rates significantly without cutting into their own margins,” he added..
