New private home sales in May fall by 78.7% from last year
New private home sales dwindled in May, dipping to the lowest point recorded for the month of May since record-keeping began in June of 2007. They were also down nearly 80 per cent year on year.
Sales have been sluggish lately, which has exacerbated the seasonal slump in mid-year.
Data released by the Urban Redevelopment Authority (URA) on Tuesday (Jun 18) revealed that developers sold 221 condo units in May, down 78.7 per cent year on year from the 1,039 units that were sold one year ago.
The May sales figures that exclude executive condominiums (ECs), are also 26,6 % lower than the 301 units that were sold in April.
May sales were among the lowest recorded in the past three months, and the lowest for May since 2008 in which 453 units were sold.
In May, which includes ECs, there was a total of 261 units sold, and 248 units were introduced in comparison to 1,056 units sold, and 1,595 introduced in 2023. For comparison, in April 2024, 352 units sold and 278 units were launched.
The numbers for the month of May 2023 were helped by the debut of two new projects – The Continuum, a 99-year-leasehold project in District 15 with 816 units and The Reserve Residences (99-year-leasehold) which is a 732-unit development in District 21, with 792-year leasehold.
In May of this year, no major projects were launched in the suburbs or city fringe. These houses are generally more affordable and accessible than those in the top segment.
Primary market sales are declining substantially, despite the holiday slump.
Developers have sold an average of 8,853 private housing units each year over the past 10 years. This is an average monthly sales of 738 units. For the first five months in 2024, developers have sold only 1,697 units, which is far less than the sales volume required for the average annual sales of 8,853 units.
The recent slump in sales has led several analysts to lower their projections for the coming year. Knight Frank had estimated that primary sales would range between 7,000-9,000 units in 2024. This estimate has been reduced to less than 7,000 units.
CBRE has lowered its estimate for new home sales to 5,500-6,500 units instead of 7,000-8,500 units. Private prices for residential properties are up 1.4 percent quarter-on-quarter during Q1, are likely to rise at a slower pace through the rest of the year.
Mak believes that sales on the primary market could drop to the level seen during the 1998 Asian Financial Crisis, when just 6,096 units were sold during the year.
The amount is likely to remain in check until mortgage rates fall or the government relaxes some cooling measures.
The market is expected to grow up to 3-4 percent in 2024, who does not expect a major change with household balance sheets robust and inventory that is not sold at a low level. The recovery in sales for developers is expected to take place after 2025.
Two small projects that are freehold, the Straits At Joo Chiat and the 999-year leasehold Jansen home in District 15, each having 21 units, were announced in May. Jansen House moved three units at a median price of S$2,098 a square foot (psf) and Straits at Joo Chiat moved two units at a median price of S$2,091 per square foot.
One of the units was sold by 99-year leasehold Skywaters Residence last month, to a buyer from outside the country at S$47.3 million, or S$6,100 per sq ft. The buyer paid out S$28.4 million in Additional Buyer’s Stamp Duty. The Shenton Way project has yet to be launched publicly and was marketed to selected customers.
In all, just 15 percent of the 1,595 units that were sold in May 2023 sold last month. This is also a little less than the 278 unit launch in April 2024.
URA information revealed that the suburb Outside Central Region (OCR), which is the third segment of the market was the most popular in private and condo purchase, accounting for 63,8 per cent of all sales in May.
The remainder of Central Region or the city fringe was responsible for about 30 percent of the primary sales. The Core Central Region, which was responsible for 12.2 percent of new sales during the month, came in the third-placed region.
The top 10 most performing projects of May were from projects that are currently operating within the OCR and RCR. This indicates that buyers are becoming sensitive to price in the face of economic decline and the high mortgage rates.
The top-selling property for this month was the 99-year leasehold Lentor Hills Residence in District 26. It sold 25 units with a median of S$2,164 psf.
The Lentor area also saw the highest number of transactions, with 69 in the last month.
Looking at a slight pickup in the second half of the year, when more major projects come to market. This includes larger developments such as the 99-year leasehold Emerald of Katong in District 15 and the 99-year leasehold The Chuan Park in District 19, both with over 800 to 900 units.
