Sales of new homes in 2023 will be the lowest since 15 years because of December’s downtime

The RCR new-sales volume was up 11.3% year-on year in 2023, but those for the OCR (old sales) and CCR (new sales

Urban Redevelopment Authority’s (URA’s) data from Monday, January 15, showed that developers sold 135 condos in December of 2023.

December’s sale was 83 percent lower than the 784 unit sales in November 2023. It was also 21 per cent less than the 170 unit sales in the previous month.

A seasonal year-end slump, coupled with the lack of new housing projects that were launched during the period, led to new home sales reaching their lowest level monthly since January 2009. At the time, 108 new units were sold.

Estimated sales of 6,452 new houses in 2023 were 9.1 % lower than in 2022 (7,099 homes) and less than half what was sold by developers during 2021.

This year, the number of new home sales was also the lowest in 15 years.

A combination of factors could have contributed to the sales decline last year, including property cooling measures set for April 2023 and a lack of new projects, macroeconomic uncertainties, and interest rate increases.

Experts said that the figures were encouraging, given that stamp duty will be raised for all purchasers in April of 2023 except for Singaporeans buying their first homes.

For December, there were 45 and 65 transactions in the Outside Central Region.

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PropNex’s December data showed that The Continuum and The Landmark were the two top-selling projects within the RCR City fringe areas. The Continuum saw 17 units sell at a S$2,775 median price per square foot, while The Landmark sold 13 units at S$2,853 psf.

The Myst had nine units selling for S$2,199psf and J’den sold seven units at S$2,577psf.

Midtown Modern was the most popular CCR project in December of 2023. It sold six apartments at a median cost of S$2,882/sqft and S$3,258/sqft, respectively.

The total number of private home sales for the year fell to its lowest level since 2008.

The sales slump was not unexpected, since developers held off on new project launches in 2011 due to the successive cooling measures of the market and low buying sentiment.

The average rate of take-up for new projects with at least 100 units within the first one month has also declined from 64% in 2020 to 62% in 2012, and then down to 55% in 2030.

Analysts expect that approximately 7,000 to 8, 000 new private homes will be sold in 2020, an increase on the 6,452 unit sales in 2023. However this number is below the average five-year new developer sales of 9,763 housing units.

In H2 2024 the mood may improve if interest rate eases and if the economy recovers.

The first quarter could see the sale of 3,300 homes across 13 different projects.

For the entire year, RCR led the overall sales of new private homes, accounting for 3,040 (47.1%) units. The OCR followed with 1,953 (30.3%) units and CCR came in second with 1,459 (22.6%) units.

The RCR new-sales volume was up 11.3% year-on year in 2023, but those for the OCR (old sales) and CCR (new sales) were down by 21% year-on year and 23% year on.

About 32,4% of new homes in 2023 are priced between S$1.5m and S$2m, around 20,8% fall within S$2m and S$2.5m, and 18,2% fall within S$1m and S$1.5m.

Home prices below S$2.5M will still be the most popular, even 2024.

Low liquidity and smaller Budgets

Foreign purchasing demand has remained low. Foreign buyers bought four properties in November, accounting for 3 per cent of monthly sales. However, this is still higher than the 1.8 percent or 14 caveats recorded in November.

There were approximately 235 foreign purchases from January to may 2023. In the period from June 2023 to December 2023, this number dropped to just 80 transactions. The ABSD increase on foreigners took away a significant portion of demand, he said. From end-April, the Additional Buyers’ Stamp Duty that foreign buyers pay on residential property increased from 30 to 60 percent.

For the full calendar year, foreigners’ share of private home purchases (non permanent residents) decreased from 7.1 percent in 2022 down to 5 percent in 2023.

URA Realis data revealed that there were two non landed homes, at Watten House, which transacted for over S$10 million. Meanwhile, six of them were sold in December 2020 for at least S$5 millions.

As HDB flats are being sold at lower valuations, there may be a decline in the demand for private housing by 2024.

He added that lower liquidity levels and smaller budgets could limit the demand from upgraders for private housing.

The government has awarded 20 projects for the launch of new housing units. URA data indicated that 7,911 (including ECs and ECs) new units were launched last.

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