Analysts forecast new private home sales will pick up in the second half of the year, as more projects are scheduled for launch.
SINGAPORE: Sales of new private homes in Singapore fell in June, the first dip after five straight months of increases in 2023.
Excluding executive condominiums, developers sold 278 units in June, a 73.2 per cent drop from the 1,039 units sold in May, according to data released by the Urban Redevelopment Authority (URA) on Monday (Jul 17).
On a year-on-year basis, private home sales fell by 43 per cent from the 488 units sold in June 2022.
The number of units launched for sale also saw a significant decline, with the 31 units launched in June 98.1 per cent lower than the 1,595 units in May, and 92.2 per cent lower than the 397 units in June 2022.
Analysts said the decrease in private home sales was due to a lack of major project launches in June, with the 17-unit Lavender Residence being the only project launched that month.
“The substantial decline in sales volume can be attributed to a high base effect, where two major project launches (The Reserve Residences and The Continuum) drove May 2023 sales to a 12-month high,” said Lam Chern Woon, Edmund Tie’s head of research and consulting.
ERA Realty Network’s key executive officer Eugene Lim cited the June school holidays, with many Singaporeans away on vacation, for developers to avoid launching any new projects.
CBRE’s Southeast Asia head of research Tricia Song said June’s sales figure, which is the lowest since the 170 units sold in December 2022, reflects “cautious buying sentiment amidst weak economic conditions”.
She noted that the 3,463 new private homes sold in the first half of 2023 is 18 per cent lower compared to the 4,222 units sold in the first half of 2022.
According to ERA’s Mr Lim, the cooling measures implemented in April had a “significant impact” on foreign buyers’ demand for private homes, resulting in a decline in sales.
DEMAND REMAINS “ROBUST”
Analysts forecast new private home sales will pick up in the second half of the year, as more projects are scheduled for launch.
A total of 1,196 new launch units are set to be introduced in the upcoming months, said Mr Lim.
“Developers are riding on the positive buying momentum as new home demand from first-time buyers remains robust”, said OrangeTee and Tie senior vice president Ms Christine Sun.
However, Mr Lam said that economic headwinds may persist. He noted that Singapore’s unemployment rate, while low, ticked up to 1.9 per cent in May, and that interest rates may resume trending upwards as the US Federal Reserve continues its monetary tightening.
On the other hand, Huttons Asia senior director Lee Sze Teck said that US inflation slowed to 3.0 per cent in June, which could lead to a pause in interest rate hikes.
“This will boost the property market,” he said.
Analysts estimate between 7,000 and 8,000 new homes will be sold in 2023, with overall home prices rising between 3 per cent and 5 per cent.