New private home sales bounce back in September after seasonal lull

SINGAPORE - Developers’ sales regained some footing in September after clocking their lowest-ever sales figure for the month of August since official records were made available by the Urban Redevelopment Authority (URA) in 2007.

Based on data released on Oct 15, a total of 401 new private homes, excluding executive condominiums (ECs), were sold in September.

This represented a 90 per cent recovery from the 211 units recorded in the prior month, as well as an 84.8 per cent increase from the year-ago period.

Singapore Realtors Inc’s head of research and data analytics Mohan Sandrasegeran attributed September’s uptick to renewed market activity and growing buyer confidence following the conclusion of August’s seasonally quiet Ghost Month period.

“The post-festival period often sees a revival in sentiment, allowing developers to capitalise on renewed interest and launch fresh projects to meet demand,” he said.

Including ECs, new home sales rose 75.3 per cent to 433 units versus 247 units sold in August, and were 29.3 per cent up from the 335 units sold the year before.

Within the EC segment, developers sold 32 new units for September, down from 36 the month before.

Huttons Asia’s senior director of data analytics Lee Sze Teck said this was because buyers were “hampered by the limited choices in the market” as the number of unsold EC units plunged to a record low of 171.

A total of 437 new private home units were released for sale in September across existing projects.

This was 60.7 per cent higher than the 272 units launched in the prior month.

The best-selling and only residential project launch in September was Bukit Sembawang’s 8@BT, where more than half or 83 units were sold at a median price of $2,727 per sq ft (psf), according to URA and Huttons Data Analytics as at Oct 15.

This was followed by 72 units at Pinetree Hill transacted at a median price of $2,501 psf.

Huttons’ Mr Lee said 8@BT’s design was “well thought through” with efficient one- and two-bedroom layouts, which minimise corridors and do away with balconies.

“When the product is right with good finishes, buyers are willing to pay a premium for this unique product,” he said.

He viewed the $2 million-and-below price range of over 60 per cent of the project’s units as a “comfortable budget for many buyers”.

Similarly, ERA Singapore’s chief executive Marcus Chu attributes the strong performance of 8@BT to its status as a premium development, along with its prime location with “few new home options” in the vicinity.

Ms Christine Sun, chief researcher and strategist of OrangeTee Group, said most private residential home buyers’ preference remained below the $2.5 million mark, as 64.4 per cent of September’s total new home sales fell within this price threshold.

Of the 401 units sold in September which did not account for EC sales, over 40 per cent or 165 units were from the Outside Central Region.

More than half or 221 units sold came from the Rest of Central Region, and about 3.7 per cent or the remaining 15 units came from the Core Central Region.

Singaporeans made up 90.3 per cent of buyers for September.

Looking ahead, Mr Lee believes the proportion of Singaporean buyers is likely to stay elevated above 85 per cent in the coming months as he believes more buyers are considering taking up citizenship before buying homes.

By value, the top transactions for the month were the sale of two units at 32 Gilstead for over $14 million each. Both buyers of these units were permanent residents.

Both OrangeTee and Huttons are projecting new home prices to increase by up to 2 per cent in 2024.

OrangeTee anticipates 5,000 to 5,500 new homes to be sold over 2024, while Huttons is estimating that sales will reach up to 5,000.

“We anticipate that the positive momentum seen in September will carry over into the coming months, driven by notable developments such as Norwood Grand and Meyer Blue, which are expected to boost new home sales in October,” said Mr Sandrasegeran.

“Additionally, the launch of Union Square Residences in November is set to further reinvigorate the market, marking a shift in momentum after previous quieter months.”

Likewise, Mr Chu said he expects a “strong boost” in new home sales come October and November, as the bulk of upcoming launches are expected to take place in these months.

The ERA chief observed improved buyer confidence and activity following the US Federal Reserve’s announcement of a 50-basis point reduction in interest rates.

“Show-flats of upcoming launches are getting busier, and we are receiving more inquiries from buyers,” said Mr Chu.

He estimates that 5,500 to 6,500 new homes will be sold by end-2024.

Mogul.sg’s chief research officer Nicholas Mak believes sales momentum will “gradually gather pace in October” before pausing in December due to the year-end holidays.

He estimates that residential primary sales could “drop to a record low” of 4,000 to 5,000 units in 2024.

This is given how only 3,077 private housing units have been sold in the first nine months of 2024 – marking the lowest primary market sales for the January to September period since 1996.

“The sales momentum will likely pick up again in February (2025) after the Lunar New Year, provided developers do not price their new launches too aggressively,” said Mr Mak. THE BUSINESS TIMES