Ghost Month: Developer sales decreased by 44.9 percent, and fewer projects launched
Developers may choose to delay launches until 2024, when rates stabilize and sentiment improves, due to the lower sentiment and the nevertheless high interest rates, as well as due to the holiday season in December.
Because of the variety of products available on the market, consumers are becoming more selective in their selections.
Developers will need to be careful in pricing these new projects in order to guarantee that they sell at a high volume. There will be no substantial price cuts as the developers are already committed to capital expenses.
The OCR will be the center of most major project launches within the next few months. These include the 265-unit Lentoria and the 474-unit Hillock Green in the new Lentor Hills estate. In Jurong in Jurong, the J’den Condo, located in the site of the former JCube Mall, will have 368 units. The 440-unit Sora condominium, located at Yuan Ching Road, will also be built. The 341-unit Hillhaven at Hillview Rise.
In addition to ECs, 335 units were sold in September, and launched 68 units. In August, 649 units were sold and 950 were launched.
The September sales figures that does not include executive condominiums (ECs), is less than one-quarter of the 987 units that were sold in the same period in 2022. It’s also the month that has the lowest number of sales in the year thus far, in addition to the month of December 2022 where developers sold 170 units.
In addition, buyers’ sentiment remained “cloudy and a little chilly” due in part to the cooling measures rolled out in April.
Leedon Green is obtaining TOP status soon in December 2023.
According to the figures that was released on Monday (16th October) by the Urban Redevelopment Authority, developers sold 217 homes for sale in September. This is a drop of 44.9% from the 394 units removed in August.
Just one new project was launched in September: leasehold of 999 years 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 psf.
The rising additional Buyer Stamp Duty (ABSD) and the soaring economic uncertainty and inflation, along with the rising amount of housing options for public like Build-to-Order, for instance are just a few of the factors buyers consider when weighing their options.
The number of private homes sold decreased in September, which was exacerbated by an absence of new projects launching during the gloomy Hungry Ghost Festival.
The freehold Pullman Residences Newton was the second-highest, having 21 units sold for a median price of S$3,258 psf. In the three segments of the market that are available, the Core Central Region (CCR) held up “relatively better” than the other two segments. The 76 CCR units sold accounted for 35 per cent of condo and private apartment sales in September.
Overall, market watchers predict that private new home sales, excluding ECs are expected to range between 6,000 and 7,000 this year, a little less than the 7,099 homes sold last year.
The only bright area was the EC market, which saw 118 units moved last month. The demand for ECs has been high as price-sensitive buyers seek the best alternative to buying a home. Additionally, those who purchase ECs are given upfront remission on ABSD
Of the 118 EC units, some 100 were sourced from Altura located in Bukit Batok, the only EC project to be launched this year. The overall sales for the project to 88 per percent. Altura was also the top-selling project for a second consecutive month, selling units at a median price of S$1,473 a square foot (psf) during September.
In the OCR the sales of real estate fell by 64 percent month-over month, to 70 units. For the Rest of Central Region, it dropped 33 percent from month to month.
Some buyers avoid buying a home during the festival because of traditional beliefs. Developers tend to steer away from launching new projects during that period too.
Altura also set an industry benchmark in the EC market by selling an area of 980 square feet for S$1.6m or S$1,585 psf. This is higher than the previous psf price high held by Copen Grand, which stood at S$1,499 psf.
This brings the number of primary home sales for the first 9 months of 2023 to 5,407 units – 15.6 percent lower than the 6,409 units transacted in the same period in the year before. This is the lowest since 2016, when 5,656 homes were sold.
It’s not too surprising that home sales fell following the Hungry Ghost Festival, which was over in mid-September.
The increasing geopolitical tensions across the world and the potential effects of the conflict in the Middle East may also dampen the spirit of the real estate market.
Looking ahead, analysts expect that sales for developers to remain subdued and the mood of buyers to stay muted amid growing macroeconomic uncertainty as well as rising interest rates.