Singapore’s housing market continued to slow in September with private home sales plunging by 45 percent from the 394 units sold a month prior, falling to a nine-month low of 217 units as developers were seen holding back project launches in the face of growing inventories.
Last month’s sales tally was the lowest since 170 units were sold in December of last year, and was 78 percent short of the 987 homes developers managed to sell in September 2022, according to an analysis of data from the Urban Redevelopment Authority (URA) by real estate agency Propnex.
The slowdown affected the market island-wide after developers released just 68 new homes onto the market last month, which was just a fraction of the 590 units made available in August.
The pause in launches comes after a flurry of new projects this year, coupled with slowing sales pushed the Lion City’s inventory of unsold homes to 3,537 units in September, which was up 72 percent from the 2,058 units of stock on hand at the end of 2022, based on data from OrangeTee & Tie.
“The lack of major launches, cautious market sentiment, and buyer fatigue continued to stymie new home sales in September, following the relatively muted sales in August,” said Wong Siew Ying, research and content head at PropNex. “With private home prices peaking and ample unsold units in the market, coupled with the still high interest rates and cautious sentiment, there may be some inertia in the market where buyers are taking time out to review their options.”
Developers Hold Back
Some analysts saw developers holding back on launching new projects after the market slowed in August, at the same time that homebuyers are becoming more cautious about purchases.
“Demand has generally softened after new cooling measures were implemented in April. Some buyers may have also turned to the resale market as price gaps remain wide between new and resale homes,” said Christine Sun, senior vice president of research and analytics at the consultancy firm.
Last month’s total brought third quarter sales to 2,024 units, down 7.5 percent year on year due to “softer buyer demand in the face of market headwinds,” according to Chia Siew Chuin, residential research head at JLL.
From January to September, developers sold 5,407 condos in Singapore or about 16 percent less than the 6,409 flogged in the same period a year ago. Chia said it was also the lowest nine-month tally in seven years or since the 5,656 units sold in the first three quarters of 2016.
The sole new project launched last month was The Shorefront in the Pasir Ris area of Singapore’s Upper East Coast, which found buyers for just three of its 23 units at a median price of S$1,902 per square foot.
During September, home prices stayed flat in Singapore’s suburban areas, referred to as the Outside of Central Region by the URA, while prices in the urban fringe areas of the Rest of Central region fell by 2.9 percent, according to an analysis by PropNex.
The housing market in downtown Singapore, which is dominated by the luxury market, saw average prices rise 10.5 percent despite sales volume falling 21 percent to 76 units last month – the lowest monthly tally in more than two years.
A Quiet Year End
A continued slowing of project launches will keep the housing market quiet this month, said Propnex’ Wong, although she expects CapitaLand’s 368-unit J’den project in Jurong East to lift sales in November.
Developers are set to roll out at least 1,022 condos over the remainder of the year, including the 474-unit Hillock Green condo in Lentor Hills being built by a consortium led by Soilbuild and UOL Group’s 180-unit Watten House luxury development in Bukit Timah.
Chia said developers are likely to keep prices attractive to boost sales but does not expect heavy discounts. She estimates full-year sales across the city-state to come in between 6,500 and 7,000 units for 2023 after developers sold 7,099 units last year.
“Given that buyers are largely cost-conscious, sensitive pricing by developers for upcoming project launches in 4Q23 could support sales volume,” Chia said. “However, there will not be significant price cuts as developers had committed to earlier capital outlays.”
A URA report on third quarter housing sales showed the average price of a home in Singapore rose 0.5 percent during the period from the preceding three months, rebounding slightly from a 0.2 percent decline in the second quarter.