Developer sales down 26.6% m-o-m in May, Lentor Hills Residences tops charts with 25 units sold

Last month, developer sales of new private residential units (excluding Executive Condominiums) fell by 26.6% month-on-month, with only 221 units sold, following a modest 301 transactions in April. This also marks the lowest May new home sales figure recorded by the URA since records began in 2008.

The drop in sales volume came as no surprise given the absence of major project launches in the suburbs (Outside Central Region) and city fringe (Rest of Central Region).

Apart from the 190-unit luxury development Skywaters Residences, only two boutique projects were launched for sale last month: the 21-unit Jansen House and the 16-unit Straits at Joo Chiat.

In May, developers rolled out a total of 248 homes in the primary market, representing a 10.8% month-on-month decline from the 278 units released in April.

Some developers may adopt a strategic approach, timing new project launches to maximise market impact and secure optimal sales performance. This strategy aims to drum up peak interest and demand from prospective homebuyers and investors.

The primary residential market appears to have entered a lull, with nearly 20,000 homes completed in 2023 and interest rates expected to stay elevated for much of 2024. 

Homebuyers remain far more selective, no longer showing the sense of urgency and FOMO (fear of missing out) that characterised the market between the second half of 2020 and the first half of 2022.

May 2024 also marked one year since the Additional Buyer's Stamp Duty (ABSD) rate for foreign buyers was doubled to 60%. Between June 2023 and May 2024, foreign buyers accounted for an average of just 3.1% of all new home purchasers. This is significantly lower than the monthly average of 11.2% recorded in the preceding 12-month period.

Lentor Hills Residences emerges as May's top seller

In terms of units sold, the best-selling project was the 598-unit Lentor Hills Residences along Lentor Hills Road. The development moved 25 units last month at a median price of $2,164 psf, bringing its cumulative sales to approximately 88% to date.

Lentor Hills Residences is jointly developed by Hong Leong Holdings, GuocoLand, and TID (a joint venture between Hong Leong Group and Mitsui Fudosan). The 99-year leasehold development was launched in July last year, with half of its units snapped up over its launch weekend at an average price of $2,080 psf.

To date, five new condominium projects have been launched in Lentor (District 26). Out of the 2,477 units released for sale, nearly 75% have been absorbed by buyers.

Pent-up demand for newly built private housing in the precinct, coupled with the allure of living in a brand-new private residential enclave, continues to underpin buying interest in new condos in the area.

Meanwhile, Hillhaven took second place on last month's top-seller charts. The 341-unit development along Hillview Rise sold 23 units at a median price of $2,099 psf, bringing total sales to around 37.5% to date.

When the project was launched in January, about 59 units were sold at an average transacted price of $1,903 psf.

Hillhaven may have benefited from a spillover effect, as nearby The Botany at Dairy Farm has crossed the 90% sales mark.

With The Botany at Dairy Farm over 90% sold, prospective homebuyers and investors interested in the Hillview area have begun turning to Hillhaven as a viable alternative.

The Botany at Dairy Farm sold 18 units last month at a median price of $1,968 psf. The 386-unit development on Dairy Farm Walk was launched for sale earlier, with 187 units (48%) transacted on its opening weekend at an average price of $2,070 psf.

Luxury condo sales pick up pace

Three luxury condominiums dominated the transactions crossing the $10 million benchmark: Watten House on Shelford Road, 32 Gilstead on Gilstead Road, and Skywaters Residences on Shenton Way.

Notably, the 180-unit Watten House is now 80% sold, with three 3,412 sq ft units transacted above $10 million: one unit went for $12.2 million ($3,576 psf) in January; another fetched $11.8 million ($3,457 psf) in March, and a third sold for $11.8 million ($3,457 psf) in April.

Meanwhile, 32 Gilstead is an exclusive boutique project by Kheng Leong featuring just 14 units. In April, three units in this freehold development transacted above $14 million: a 4,198 sq ft unit changed hands for $14.5 million ($3,455 psf), a 4,209 sq ft unit sold for $14.5 million ($3,445 psf), and another 4,198 sq ft unit fetched $14.4 million ($3,431 psf).

At Skywaters Residences, the sale of a 7,761 sq ft unit set a new benchmark price for non-landed, 99-year leasehold new launches. Perched on the 57th floor, the unit was sold for $47.3 million, or $6,100 psf, making it the headline property transaction of the month.

In May, developer sales in the Core Central Region (CCR) slipped 16% month-on-month to 27 units. In terms of units sold, the two best-performing CCR projects were 19 Nassim and Klimt Cairnhill, each moving 6 units at median prices of $3,373 psf and $3,317 psf, respectively.

Punitively high ABSD rates continue to keep foreign buyers on the sidelines, with only one luxury home transaction completed by a foreign buyer in May 2024.

Developer sales remain subdued

Developer sales in June 2024 are expected to stay muted amid a dearth of major launches, compounded by the mid-year school holidays when many families travel overseas and market activity typically slows.

New private home sales in 2Q 2024 are projected to remain lacklustre, likely coming in below the 1,164 units sold in 1Q 2024 and significantly down from the 2,127 units moved in 2Q 2023.

The market slowdown has become more pronounced this year, with total sales reaching 1,686 units from January to May—a 47.1% slump compared to the 3,185 units sold over the same period last year.

Overall, take-up rates for new launches have been generally subdued year-to-date as buyers turn increasingly selective amid a wide range of options, while buyer fatigue and pushback against high price points grow. This cautious stance among homebuyers will likely persist until interest rate cuts and an economic pickup help revitalise market sentiment.

Anticipated launches slated for the coming month include the 440-unit Sora in Jurong East, the 276-unit freehold Kassia on Flora Drive in the East, the 916-unit The Chuan Park, and the 348-unit Norwood Grand in Woodlands.

With several high-profile developments on the horizon, buyers can look forward to more market activity in the months ahead. Most of these projects are situated in the suburbs or city fringes, making them particularly appealing to HDB upgraders and local investors.

In light of the tepid absorption rate over the first five months of the year, Knight Frank is revising down its full-year sales projections.

New home sales are very likely to fall below 7,000 units. Transaction volumes are expected to remain subdued until interest rates are cut or the government relaxes some of the cooling measures.

Similarly, CBRE has trimmed its new home sales forecast from 7,000–8,000 units down to 5,500–6,500 units. With persistent economic uncertainties delaying expected rate cuts, the timeline for a meaningful recovery in primary developer sales could be pushed back into 2025.