New private home sales fall 82.8% in December, sinking to lowest level since January 2009
Year-end holidays and the absence of property launches were among the reasons for the drop in sales, property analysts say.
A general view of private homes in Singapore. (File photo: AFP)
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SINGAPORE: New private home sales typically see a lull at the end of the year, however, sales in December sank to a near-15-year low.
Sales of new private homes last month fell 82.8 per cent from November, with developers selling just 135 units, data released by the Urban Redevelopment Authority (URA) on Monday (Jan 15) showed. This figure excludes executive condominiums (ECs).
This is the lowest figure recorded since January 2009, when a mere 108 units were sold amid the global financial crisis, said OrangeTee & Tie's senior vice president of research and analytics Christine Sun.
A total of 784 units were sold in November 2023.
On a year-on-year basis, new private home sales fell 20.6 per cent last month from the 170 units sold in December 2022.
LACK OF LAUNCHES, YEAR-END HOLIDAYS
Property analysts attributed the lull in the market to the year-end holidays and the lack of major project launches during the period.
As December is "traditionally" a quieter period in the real estate market, a decline in the number of new home sales transactions was expected, said Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc.
"This slowdown is often attributed to the festive season and a general lack of new project launches during this time as potential buyers were likely preoccupied with holiday travel plans or personal commitments like weddings, diverting their attention away from property transactions," he said.
Just 36 new units were launched for sale last month – the second-lowest number seen since URA began releasing monthly data on launches and sales in July 2007.
In 2023, developers sold about 6,450 new private homes, excluding ECs. This is a "significant" drop of 9.1 per cent from 2022, Ms Sun said.
According to Ms Sun, this is the lowest annual sales figure recorded since 2008, when 4,264 units were sold.
"Last year's sales decline could be attributed to a combination of factors, including the property cooling measures in April 2023, (a) lack of project launches, macroeconomic uncertainty and interest rate hikes," she said.
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In April, the government announced that foreigners buying any residential property in Singapore will have to pay an additional buyer's stamp duty (ABSD) of 60 per cent, up from 30 per cent.
ABSD rates for Singaporeans and permanent residents buying their second and subsequent residential properties were also increased.
Huttons Asia's senior director for research Lee Sze Teck said the higher ABSD on foreigners "did take away a substantial chunk of demand" from the property market.
According to Mr Lee, from January to May 2023, there were an estimated 235 residential property purchases by foreigners. This fell to 80 transactions from June to December 2023, showing the "effectiveness of the policy in reducing the purchases by foreigners".
LOOKING AHEAD
Mr Sandrasegeran said that he expects new private home sales to get a boost in January, with the launches of major non-landed projects such as Hillhaven and the Arcady at Boon Keng on the horizon.
"These new launches, strategically scheduled just before the Chinese New Year – a period when the market typically slows down – are poised to invigorate the new launch market and appeal to a diverse group of buyers and investors," he said.
Ms Sun said that about 30 new projects could be launch-ready this year, excluding ECs. This would add more than 12,000 new homes to Singapore's supply.
"Even if developers stagger their launches or face unforeseen circumstances, we still anticipate 23 launches, which could yield up to 8,800 units," she said.
As there will be more supply this year, some price pressures may be alleviated, said Ms Sun, who added that prices of new private homes were predicted to climb by about 2 per cent to 4 per cent this year.
