New private home sales fall 63.6% m-o-m in August amid lack of new launches

Developers sold 208 new private homes (excluding Executive Condominiums, or ECs) in August, down 63.6% from the 571 units sold in July. Including ECs, new home sales fell 59.9% month-on-month (MoM) from 608 units in July to 244 units in August.

The MoM drop in sales came as developers held back on launching new projects during the seventh lunar month (Hungry Ghost Festival), resulting in no major new launches in August.

Instead, developers moved units from previously launched projects. A total of 272 new homes were released for sale last month, representing a 55.8% MoM decline compared to the 616 units launched in July. Developer sales in July had been buoyed by the launches of the 440-unit Sora in Jurong Lake District and the 276-unit Kassia in Changi.

Compared to the 394 new homes sold in August 2023, sales dropped 47.2% year-on-year (YoY). Year-to-date (YTD), developers have sold 2,668 units, marking a 48.6% YoY decline from the 5,190 units moved between January and August last year.

Last month's new home sales marked the lowest tally for the month of August since 2008, when 325 new homes were sold. It was also the second-lowest monthly sales volume recorded so far this year, behind February's 153 units.

The sluggish sales underscore homebuyers' tentative stance amid softer economic conditions, elevated interest rates, and growing price resistance. In terms of annual new sales volume, 2024 is on track to be the weakest year since 2008 (when 4,264 new private homes were sold), reflecting cautious market sentiment that has persisted since late 2023.

Despite the decline in sales volume, the overall median transacted price of new private homes rose 42% MoM, climbing from $1.7 million in July to nearly $2.4 million in August.

A higher proportion of units were transacted at higher price quantum levels this month. In July, bolstered by the launches of Sora and Kassia, around 41% of new homes were sold below $1.5 million. Fresh project launches often feature a larger mix of smaller units entering the market at lower price quantums.

In contrast, only 5.9% of transactions in August were priced below $1.5 million, with a higher share of homes sold in higher price brackets.

Sales Breakdown by Market Segment: OCR Leads the Pack

Demand for new homes in August was predominantly concentrated in suburban and city-fringe projects, which are perceived to offer more accessible pricing and prime locations.

Tembusu Grand was the best-selling project last month. The 638-unit development along Jalan Tembusu in the Rest of Central Region (RCR) sold 30 units at a median price of $2,455 psf. Overall, the RCR accounted for 31.3% of August's new home sales.

However, the Outside Central Region (OCR) was the top-performing segment last month. The OCR recorded 123 transactions, accounting for 59.1% of all units sold in August. Top-selling developments included Hillock Green, which moved 17 units at a median price of $2,108 psf, and Lentoria, which sold 15 units at a median price of $2,217 psf.

Meanwhile, the Core Central Region (CCR) recorded 20 transactions, with the bulk of sales driven by projects such as One Bernam, 19 Nassim, and Watten House.

In the EC segment, developers sold 36 units in August, easing 2.7% MoM from the 37 units transacted in July. The 616-unit North Gaia in Yishun accounted for the lion's share of sales, moving 24 units at a median price of $1,306 psf.

There are currently around 200 unsold new EC units left on the market. This tight supply bodes well for upcoming EC projects slated to launch later this year, such as the 504-unit Novo Place EC along Plantation Close in Tengah.

Luxury Market Highlights

August saw seven new non-landed private residential transactions crossing the $5 million mark, up from two in July. Furthermore, while July recorded no transactions above $10 million, last month saw one such deal: a 4,198 sq ft, four-bedroom unit at the freehold 32 Gilstead that transacted for $14.71 million ($3,505 psf).

This transaction marks the largest freehold condominium deal in the first eight months of 2024, demonstrating the resilience of the luxury segment. High-net-worth individuals, particularly Singapore Permanent Residents (PRs), continue to show strong interest in prime freehold properties.

In terms of buyer profile, foreign purchases totalled five transactions, comparable to July. Proportionately, foreign buyers accounted for 2.4% of all buyers in August, up from 0.9% in July.

Singaporeans made up 88.5% of buyers in August, while PRs accounted for 18 units, or 8.6% of total buyers. This was down from the 64 transactions (11.7% of total buyers) recorded in July.

Upcoming Launches and Anticipated Rate Cuts to Support Sales

New home sales are expected to stage a modest rebound in September, anchored by the launch of 8@BT. The 158-unit condominium near Beauty World MRT station is scheduled to launch for sale on 21 September.

Meanwhile, other pipeline launches are expected to support sales over the coming months. These include the 226-unit Meyer Blue, slated to preview in late September, as well as major potential launches such as the 916-unit The Chuan Park at Lorong Chuan and the 847-unit Emerald of Katong along Jalan Tembusu.

This influx of new project launches could spark a pickup in sales activity in 2H 2024, potentially surpassing the 1,889 new homes (excluding ECs) sold in 1H 2024.

In addition, the anticipated US Federal Reserve rate cut in September could bolster buyer confidence and demand by lowering financing costs. Buyers purchasing new condominiums commonly opt for floating-rate mortgage packages and stand to benefit directly from lower borrowing rates.

For the full year of 2024, new home sales are projected to reach between 5,000 and 5,500 units, with private home price growth moderating to around 2%.

Barring any major economic shocks, a resilient public housing market is likely to continue supporting the OCR and RCR segments of the private residential market going forward.