SINGAPORE - A lack of big project launches, cautious market sentiment, and the seasonal lull during the Hungry Ghost Month led to a dip in new private home sales for the second consecutive month by 44.9 per cent to 217 units in September, down from 394 units in August.

This marked the lowest monthly private home sales in nine months, since December 2022, when only 170 units were sold.

On a year-on-year basis, new private home sales, excluding executive condominiums (ECs), contracted 78 per cent compared with September 2022.

According to analysts, home buyers are becoming increasingly selective about their purchases against the backdrop of higher interest rates, a softer economic outlook and recent property cooling measures.

The number of units launched in September dived 88.5 per cent to just 68 from 590 in August, and similarly plunged 92.6 per cent compared with September 2022, according to data released by the Urban Redevelopment Authority (URA) on Monday.

Given that private home sales are supply-driven, the decline in September’s sales does not come as a surprise due to the absence of big project launches, coupled with high interest rates and buyer fatigue, noted PropNex’s head of research and content Wong Siew Ying.

“There may be some inertia in the market where buyers are taking time out to review their options,” she said.

Ms Wong also pointed out that some developers delay putting new projects on the market during the Hungry Ghost Month, as this period – which was from Aug 16 to Sept 14 this year – typically sees slower sales.

Also, the only new project launched in September was The Shorefront in Pasir Ris, which sold three out of its 23 units at a median price of $1,902 per sq ft (psf), said Mr Nicholas Mak, chief research officer at Mogul.sg.

September’s private home sales by district were almost evenly split, with 76 units (35 per cent) sold in the prime district, followed by 71 units (32.7 per cent) in the city fringes and 70 units (32.3 per cent) in the suburbs.

The 76 units represented the lowest monthly private home sales in the prime district in over 2½ years, after 58 units were sold in February 2021.

Month on month, the number of private homes sold declined, falling 20.8 per cent for those in the prime district, 33 per cent for the city fringes and 64 per cent for the suburbs.

The smaller drop in private home sales in the prime district could be partly attributed to price discounts offered at some condominium projects, and a slight increase in the proportion of units bought by foreigners, according to Mr Mak.

Citing URA Realis data, Ms Wong noted that the share of sales to foreigners rose from 2.7 per cent in August to 6.2 per cent in September, the highest proportion since cooling measures were implemented in April.

She added, however, that this jump is likely due to the low sales volume in September, with only 13 transactions made to foreigners.

Including ECs, September sales fell 48.4 per cent to 335 units from 649 in August, and also dropped 66.2 per cent from 992 a year ago.

There has been strong demand for ECs as price-sensitive buyers turn to the next-best alternatives to private homes, said Huttons Asia senior research director Lee Sze Teck.

Furthermore, buyers of ECs are given upfront remission on additional buyer’s stamp duty (ABSD), he added. The ABSD has been raised twice since December 2021 to 20 per cent for a second residential property.

Maintaining its momentum from August, Altura – the only EC launched this year – in Bukit Batok West Avenue 8 transacted another 100 units, at a median price of $1,473 psf, accounting for about 85 per cent of the monthly EC sales and 88 per cent of the project’s total number of units, said Ms Wong.

She noted that there were only 319 unsold new EC units – mostly in North Gaia – left on the market as at end-September. 

Looking ahead, CBRE’s head of research for South-east Asia Tricia Song expects 6,500 to 7,000 new private homes to be sold in 2023, potentially below the 7,099 units in 2022.

Citing weaker sentiment, high interest rates and the upcoming December holiday season as reasons, Ms Song said that developers may choose to push back launches till 2024 when interest rates stabilise and sentiment improves.

This will contribute to subdued developer sales in the last quarter of 2023, she added.

There may also be weaker demand among Housing Board upgraders because of the stabilisation of the public resale housing market, and prices may be broadly unchanged over the next few months, noted Edmund Tie’s head of research and consulting Lam Chern Woon.

The property market outlook in 2024 will depend largely on the pace of economic growth, he added.