October new private home sales drop 6.45% month-on-month to near one-year low

A dearth of new project launches in the property market in October pushed new private home sales down further by 6.45% month-on-month, with just 203 units sold — the lowest monthly tally since December last year.

However, analysts note that new launches this month, such as J’den and Hillock Green, have been met with encouraging market reception, and new private home sales in November are projected to rebound strongly.

According to the latest flash estimates released by the Urban Redevelopment Authority (URA) on Wednesday (15 November), developers sold 203 units in October, excluding executive condominiums (ECs), representing a 35.4% year-on-year drop in sales volume.

This marks the third consecutive month of declining new private home sales and the lowest monthly figure since December last year, when 170 units were transacted.

A total of 54 new private residential units were launched in October, down 20.6% from September. These were primarily mass-market homes in the Outside Central Region (OCR), accounting for 47 units. Another seven units were luxury homes in the Core Central Region (CCR). No new units were launched in the mid-tier Rest of Central Region (RCR).

URA data revealed that the RCR recorded the highest sales volume in October with 82 units sold, while the CCR and OCR logged 45 and 76 units sold, respectively.

Analyst View: Sales Drought Expected to End This Month

The two new projects launched this month moved a total of around 454 units over their opening weekends, effectively ending the property market’s two-month sales drought.

These two residential developments could generate positive spillover effects for other projects. Both set new benchmark prices on a per-square-foot (psf) basis in their respective localities.

Located in Jurong East, J’den sold 88% of its units during its launch weekend at an average price of $2,451 psf, while Hillock Green in Lentor Central moved 28% of its units at an average selling price of $2,108 psf.

While new private home sales in November should see an improvement, it is unlikely to provide a substantial boost to full-year sales figures.

Given subdued market sentiment, sustained high interest rates, and the upcoming December holiday lull, developers may hold back new project launches until next year, when interest rates stabilise and buyer sentiment picks up.

Analyst View: Full-Year 2023 New Home Sales Could Hit Lowest Since 2008

Total new private home sales for the year are projected to come in between 6,500 and 7,000 units. Not only is this below last year's 7,099 units, but it could also mark the lowest annual figure since 2008, when only 4,264 units were transacted amid the Global Financial Crisis.

In terms of home price trends, full-year price growth is expected to rise by around 3%, moderating significantly from the 8.6% increase recorded last year.

Developers staggering their project launches may be a strategic play, as it builds anticipation and buzz, capturing the attention of prospective buyers waiting on the sidelines for the right entry point. This phased approach also prevents "buyer fatigue", giving purchasers ample time to evaluate their choices.

Around 20 projects are expected to debut in the first half of next year, including Hillhaven, The Arcady at Boon Keng, The Hill @ One-North, Marina View Residences, as well as the EC development Lumina Grand.