New Private Home Sales in December and Full Year Slump to 15-Year Low

Dampened buyer sentiment during the year-end festive season, coupled with a dearth of new project launches, saw new private home sales in Singapore plunge by over 80% month-on-month to 135 units in December last year—the lowest level since January 2009.

For the whole of 2023, Urban Redevelopment Authority (URA) data indicated that developers sold an estimated 6,452 new private residential units, marking a 15-year low. Battered by the Global Financial Crisis, developers sold only 4,264 units in 2008.

December New Private Home Sales Plunge Over 80%

Latest flash estimates show that, excluding Executive Condominiums (ECs), developers moved 135 new units in December last year, down 82.8% from November and a 20.6% decline year-on-year.

Among these, the Rest of Central Region (RCR), representing the mid-tier segment, led sales with 66 units. The Outside Central Region (OCR), representing mass-market homes, and the Core Central Region (CCR), representing prime luxury homes, saw 45 and 24 units transacted respectively.

If ECs are included, new private home sales in December reached 152 units, tumbling 81% month-on-month and falling 76.2% year-on-year.

Developers launched only 36 new private home units in December last year, a steep drop of 96.3% month-on-month and a 20% decline year-on-year.

The December sales volume plummeted to levels last seen during the 2008 Global Financial Crisis, with just 135 units sold. This represents the lowest monthly sales tally since January 2009, when 108 new private residential units were transacted.

Analysts: Cooling Measures, Economic Uncertainty, and High Interest Rates Behind Low Sales

The drop in December sales comes as no surprise, as developers traditionally hold off on launching new projects during the year-end holidays and school breaks, a period when market activity typically slows down.

Taking the year as a whole, the low sales volume for new private homes in 2023 can be attributed to several factors, including multiple rounds of property cooling measures rolled out by the government. In addition, the market grappled with macroeconomic uncertainties amid fears of a potential recession last year, while high borrowing costs curtailed investment demand in the property market.

Local Demand for Prime Properties Remains Resilient; New January EC Launch Expected to Boost Sentiment

Despite the doubling of the Additional Buyer's Stamp Duty (ABSD) for foreigners, only 726 luxury residential units were launched last year, yet full-year sales reached 1,532 units. This indicates that underlying demand from local buyers for high-end properties remains intact even amid economic uncertainties.

Although December sales touched a multi-year low, analysts expect new private home sales to rebound in January this year, supported by fresh launches this month, including The Arcady at Boon Keng (172 units) and Hillhaven (341 units).

Executive Condominium project Lumina Grand is also slated to debut in January. Given the relatively more accessible pricing of ECs, the project is likely to be well-received by buyers. Based on data, the median price for new EC units stands at $1,345 psf, compared to $2,123 psf for new non-landed private homes in the Outside Central Region (OCR)—a price disparity of around 58%.

Experts: New Private Home Sales (Excl. ECs) Projected to Exceed 7,000 Units This Year

With a healthier pipeline of new projects offering buyers more choices, new private home sales are anticipated to improve this year. Potential interest rate cuts and expected economic recovery could also bolster buyer confidence. Excluding ECs, new private home sales are projected to reach between 7,000 and 7,500 units this year.