Developers’ new home sales in 2023 are at their lowest level since 15 years due to December downtime

The number of new private homes sold in December was the lowest in 15 years. This year’s total is also the weakest since 2008.

Sales slumped last year as developers resisted launching new projects in response to successive cooling measures on the market and weakening buying sentiment.

The average take up rate for new projects (of 100 or more units) in the first month after their launch has also decreased from 64% in 2021 to 72% in 2022 and finally, 55% in 2023.

The Urban Redevelopment Authority released data on Monday (15 Jan) showing that developers had sold 135 units by December 2023. This excludes executive condominiums.

The December sales were 83% lower than November 2023’s 784 units and 21% lower than 170 units in November last year.

New home sales fell to their lowest level in January 2009, when only 108 units of new homes were sold.

In 2023, developers sold 6,452 homes, a figure that is 9.1 percent lower than the 7,099 sold in 2022. This number is also about half of the total sold in 2021.

The number of new homes sold in 2008 was the lowest since 15 years.

The decline in sales last year could be attributed a number of factors including the cooling measures for property that will take place in April 2023. Other factors include macroeconomic uncertainty and rate increases.

Experts considered the results of this year as encouraging, especially since stamp duties will be raised in April 2023. This applies to all buyers, except Singaporeans who are making their first home purchase.

In December, 45 and 66 new projects were sold in the Outside Central Region and Rest of Central Region respectively. This was higher than the 24 unit sales in the Core Central Region.

PropNex data revealed that in December, the two most popular projects in RCR’s city fringes were The Continuum where 17 units sold for a median of S$2,775 psf and The Landmark with 13 units changing hands at S$2,853 psf.

The Myst was the best-performing OCR project in suburban Singapore, selling nine units for a median of S$2,199 per square foot, followed by J’den with seven units sold at a S$2,577 median price.

Midtown Modern, and Watten House were the best-selling CCR developments in December 2023. Each project sold six units at median prices of S$2,882 per square foot and S$3,258 per square foot, respectively.

The RCR was the largest seller of new homes in the private sector, with 3,040 units (47.1%) followed by OCR with 2,953 units (30.3%) and CCR at 1,459 (22.6%).

The RCR registered a total of 11,3% more new sales in 2023 than in 2018. However, the OCR and CCR saw a decline in volume by 21% and 23%, respectively.

Around 32.4 percent of new homes sold by 2023 will be priced between S$1.5 and S$2 millions, 20.8 percent within the S$2 to S$2.5million range and 18.2 % within the S$1 and S$1.5million price range.

Even in 2024, buyers will remain cautious due to the high interest rates and be wary of paying more than S$2.5million for a home.

Budgets and liquidity are lower

The foreign buying demand was subdued. Four properties were purchased by foreigners in December, which represents 3 percent of all monthly sales. This is higher than the 1/8th or 14 caveats that occurred in November.

Between January and May 2023 there were 235 foreign purchases. From June to December, the number of transactions dropped to 80. He said that the higher ABSD for foreigners had taken away a significant chunk of demand. The Additional Buyer’s stamp duty payable by foreign purchasers of residential property has doubled, from 30% to 60% since end-April.

The proportion of foreigners who bought new private homes (non-permanent resident) for the entire year fell from 7.1% in 2022 to 5% in 2023.

URA’s Realis showed that two non-landed houses – at Watten House — were transacted at more than S$10 Million, while six homes were sold at at least S$5 Million in December 2023.

Giverny Residences showflat

In 2024, HDB flats may be less popular as HDB flats have been sold for lower prices.

He said that lower liquidity and smaller budgets will limit the demand for upgraders to purchase private housing.

This year, around 10,000 new units will be introduced to the market from 20 new projects based on government land sales sites. URA data revealed that 7,911 units (including ECs), were launched in the past year.

Analysts predict that between 7,000 and 8,000 new homes will be sold by 2024. This is an increase from the 6,452 new units sold in 2023 but still below the average sales of new home developers over the past five years of 9,763 new units.

The mood could improve by H2 2024, if the interest rates are lowered and the economy is recovering.

In the first quarter, approximately 3,300 units in 13 projects could be sold.


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