New private home sales drought continues in May in absence of major new launches – The Straits Times

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SINGAPORE – A dearth of major new launches sent developers’ sales slumping to the lowest tally for May since 2008, but activity may pick up after the June holidays as a number of high-profile new launches are expected to hit the market in the third quarter.

Developers sold 221 new units, excluding executive condos (EC), in May, down 26.6 per cent from 301 units moved in April, and down 78.7 per cent from 1,039 units a year ago. Including ECs, new home sales fell 25.9 per cent to 261 units last month from 352 units in April.

With no major launches expected in June, developers’ sales are likely to be tepid in the second quarter, and could underperform the 1,164 new units sold in the first quarter this year, and the 2,127 new units moved in second quarter 2023, PropNex said.

Just 248 new private homes were launched in May – the 190-unit Skywaters Residences in Tanjong Pagar, the 21-unit Jansen House in Jansen Road and the 16-unit Straits at Joo Chiat in Joo Chiat Place – down from 278 in April. A year ago, 1,595 new units were launched.

Analysts say developers may have held back on launches in view of higher-for-longer interest rates and buyers remaining selective amid more choices and high price points.

“Amid the lack of major new launches, the top 10 best performing projects in May came from existing projects in the suburbs and the city-fringe, including 2 EC launches. This indicates that buyers have turned very price sensitive amid economic weakness and high mortgage rates,” Ms Tricia Song, CBRE’s head of research for Singapore and South-east Asia, said.

New home sales hit a 15-year low at 6,421 units in 2023, down 9.6 per cent from 7,099 units sold in 2022, following several rounds of cooling measures, softening economic conditions and elevated interest rates.

“The market situation appears to have worsened in 2024, with Jan-to-May (2024) sales at 1,686 units, 47.1 per cent lower from 3,185 units transacted” in the same year-ago period, Ms Song said.

Noting lower take-up rates across new project launches in 2024, she added that homebuyers’ tentative stance will likely persist, barring an economic rebound and interest rate cuts.

Knight Frank research head Leonard Tay noted that the market is in a quiet phase, “after the completion of almost 20,000 units in 2023 together with interest rates that look to be higher for longer, throughout most of 2024. Homebuyers are more selective, no longer showing fear-of-missing-out behaviour at showflats.”

The 598-unit Lentor Hill Residences, which is the top performer in May, sold another 25 units at a median price of $2,164 psf, followed by the 341-unit Hillhaven, which sold 23 units at a median price of $2,099 psf.

“Other than the 533-unit Lentor Mansion launched in March, the new projects that followed have been much smaller. It is likely that many home buyers are waiting for more projects to be launched,” PropNex head of research and content Wong Siew Ying said.

“Skywaters Residences, being a high-end project in the city centre, is probably above the budget of the majority of home buyers,” she added.

The Tanjong Pagar luxury project snagged the sole priciest transaction in May – a 7,761 sq ft leasehold unit sold for $47.3 million or $6,100 psf – the sixth priciest new non-landed private home sale since 1995, Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, said. The previous record was a $45 million sale of a freehold unit at Les Maisons Nassim in May 2023.

Ms Wong believes sales could pick up in the third quarter, although some developers may avoid launching projects during the Ghost Month period from Aug 4 to Sept 2.

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