Private home sales tumble 70% in August amid Hungry Ghost Month and high interest rates

Analysts believe buyers are growing increasingly cautious, partly due to prevailing high interest rates. Many are taking time to evaluate projects launched in recent months as well as upcoming launches before committing.

Following July’s buoyant sales surge, developer sales of new private homes in Singapore plunged by over 70% month-on-month in August. This was largely attributed to the Hungry Ghost Festival (seventh lunar month) and heightened buyer caution amid elevated interest rates.

Excluding executive condominiums (ECs), developer sales stood at just 394 new private homes in August, down 10% year-on-year and a sharp 72.1% drop from the 1,412 units sold in July. A total of 590 new private residential units were launched in August, down 72.6% month-on-month.

In terms of geographical breakdown, the Outside Central Region (OCR) saw the highest number of new launches with 316 units, registering 192 sales; the Core Central Region (CCR) saw 194 units launched and 96 units sold. While only 80 units were launched in the Rest of Central Region (RCR) in August, spillover demand from the substantial volume of units launched in July helped 106 new private homes find buyers during the month.

As the seventh lunar month commenced in mid-August, new launches were concentrated in the first half of the month, with no new projects brought to market in the latter half. According to caveat data, more than 283 new units were sold before the Hungry Ghost Month set in.

Developers do not necessarily hold back project launches out of superstition; if market sentiment is healthy and demand remains strong, developers will still launch during the seventh lunar month, and buyers will continue to snap up units.

Analysts: Influx of launches this year triggers "buyer fatigue"

The number of new units launched in the first eight months of the year surged by 117.6%, leading to signs of "buyer fatigue" emerging in the market.

Buyers are turning increasingly cautious, taking time to weigh projects released over the past few months against upcoming launches.

Among the new launches in August, executive condominium Altura turned in the strongest performance, moving 225 of its 360 units, or 63%.

With interest rates climbing since the second half of last year, affordability has become a growing concern for purchasers. Consequently, attention over the coming months is expected to centre on ECs.

Other private residential projects launched in August included Orchard Sophia, The Arden, The LakeGarden Residences, and TMW Maxwell.

Foreign buyers acquired 12 new private homes in August, with CCR developments accounting for half of the transactions, and the remainder distributed across the RCR and OCR. The developments most favoured by foreign buyers were Midtown Modern and Pullman Residences, Newton, each recording two sales in August. The price band between $2 million and $5 million saw the highest uptake among foreigners with four units, while three transactions exceeded $5 million.

Looking ahead, new private home sales for the full year are projected to range between 7,000 and 8,000 units. This compares with 7,099 units transacted last year, remaining below the five-year annual average of 9,763 units.