Ghost Month: Developer sales decreased by 44.9%, less projects are launched
The latest September sales figure that excludes executive condominiums (ECs) are less than a quarter of 987 units sold during the exact same month in 2022. It is the least monthly sales number for the year so far and since December 2022 when developers sold 170 unit.
In September, only one new project launched: The Shorefront on Jalan Loyang Besar (OCR), a 999-year leasehold development. Three of the 23 units were sold at S$1,902 per sq foot.
In the end, market watchers expect that private new home sales without ECs, will range between 6,000-7,000 this year, which is a bit lower than the 7,099 units sold in the previous year.
Buyers have also become notably more selective in their selections in view of the plethora of choices on the market.
ECs were the only positive, with 118 units sold this month. The demand for ECs has been strong, as price-sensitive buyers seek the best alternative to private homes. In addition, buyers of ECs are given upfront remission on ABSD
Developers must be aware of pricing for these coming launch dates to ensure sales volume. However, there will not significant price reductions since developers have previously committed to capital expenditures.
Including ECs, 335 units were sold in September and the launch of 68 units. Comparatively, 649 units were sold and 995 units were launched in August.
Major project launches on the horizon will mostly be within the OCR. These include the 265-unit Lentoria and the 474-unit Hillock Green in the new Lentor Hills estate. The Jurong region will have the 368-unit J’den condominium, which is located in the former JCube mall, as well as the 440-unit Sora located at Yuan Ching Road. The 341-unit Hillhaven is situated in Hillview Rise.
In the days leading up to the festival, old belief systems have some buyers staying away from buying homes. Developers tend to steer clear of launching projects in the same time.
The cooling measures implemented in April contributed to the “cloudy” and “slightly cold” buyer’s mood.
The quantity of private home sales decreased in September because of the absence of any new developments launched in the unfortunate Hungry Ghost Festival.
According to data published by the Urban Redevelopment Authority (URA) on Monday (Oct 16) developers sold a total of 217 private homes in September, a decrease of 44.9 percent from 394 units moved in August.
Out of the 118 EC units, around 100 came from Altura in Bukit Batok, the sole EC project launched this year. The project’s overall sales reached 88 percent. Altura was also the best-selling project for a second consecutive month, with units being sold at a median cost of S$1,473 per square meter (psf) in September.
Additionally, the increasing geopolitical tensions in the world and the potential fallout from the new war in the Middle East could further dampen sentiment in the property market.
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Pullman Residences is a freehold development located in Newton, ranked second with 21 units at the median price of S$3,258 per square foot. Among the three market segments, the Core Central Region (CCR) held up “relatively better” than the two other segments. The 76 units sold in the CCR accounted for 35% of all condo and private apartment purchase in September.
Analysts believe that the coming years will be a tepid one for both buyers and developers, as a result of increasing interest rates and macroeconomic uncertainty.
The month before, Altura set a new benchmark price for the EC market as well by selling 980 square feet of space for S$1.6 million or S$1,585 psf according to the statement. The price is more than the previous price record set by Copen Grand, which stood at S$1,499 psf.
It’s not too surprising that property sales dropped after the Hungry Ghost Festival, which was over in mid-September.
Amid weaker sentiment, still-high interest rates and the approaching December holiday season, developers may decide to extend their releases into 2024 once interest rates fall and sentiment improves.
Buyers are considering the increase in Additional Buyer’s Stamp Duty (ABSD) against the cost of borrowing and general inflation, uncertainty about the economy, and ever more public housing options in the form of Build-To-Order launch events in desirable places.
This brings the number of primary home sales in the first 9 months of 2023 to 5,407 units – 15.6 percent lower than the 6,409 units that were sold in the same time frame in the year before. This is the lowest since 2016, when 5,656 units were sold.
Meanwhile, property sales in the OCR dropped 64 percent month-to-month to 70 units. For the Rest of Central Region, it dropped by 33 per cent between the months.