New home sales for 2023 in developers are the weakest since 15-years ago due to December’s downtime
Lower liquidity and smaller spending
Foreign buyer demand remained subdued. In November, there were 14 caveats and only four foreigners bought properties.
An estimated 235 foreigners purchased goods from January 2023 to May 2023. It dropped to 80 transactions between June and December 2023. According to him the ABSD increases on foreigners have taken a big chunk out of market demand. The additional buyer’s stamp tax payable by foreigners of residential property was doubled at the end April.
For 2023 as a whole, it is estimated that 6,452 houses will be sold. This is 9% less than the 7,099 new homes sold in 2020 and half of what developers sold in their 2021 sales.
It was also the lowest number of homes sold since 2008 (4264) when new homes were first sold.
The sales decline of last year was due to a variety of factors. This includes the property cooling measure in April of 2023, the lack of project launches and macroeconomic uncertainty.
Experts see the year-end figures as encouraging numbers, given that all stamp duties except those for Singaporeans buying a first home will increase in April 20,23.
For the month of December, new projects outside the Central Region were the subject of 45 and then 66 transactions. These numbers are higher than those of the Core Central Region.
PropNex data from December shows that The Continuum was the top selling project in RCR city fringes, with 17 units being sold at a S$2,775 psf median price. The Landmark followed closely behind at S$2,853 psf.
The Myst, with nine units sold at S$2,199/sf median price, and J’den were the top performing suburban OCR developments.
Midtown Modern (six units) and Watten House (six units), which were both sold at a price median of S$2,882/sf in December 20,23, each had six sales.
For the whole year, RCR had the highest share of sales in new homes. It accounted for 3,040 (47.1%) followed by OCR (1,953 (30.3%) and CCR (1,459 (22.6%).
The RCR recorded a new-sales total in 2023 that was 11.3 percent higher than the OCR. CCR sales were down 21 per cent and 23 per cent respectively.
About 32.4 percent of new homes that will be sold in 2023 have a price between S$1.5M to S$2M. Another 20.8 percent are priced within S$2M to S$2.5M. The remaining 18.2 percent fall into the S$1M to S$1.5M range.
Even in 2024 the vast majority of transactions will involve homes priced below S$2.5m.
New home sales in the month of December were at their lowest level in 15 year, and the total for 2008 was their lowest since 2008.
The decline in sales is not surprising, given that developers held back from launching any new projects last year due to successive market cooling and a weakening of buying sentiment.
In the first months following their launch, the average take-up of new projects (with at least 100 apartments) also fell from 64 percent in 2021, 72 per cent 2022 to just 55 per cent 2023.
For the entire year, the share of new private residences purchased by foreigners (nonpermanent inhabitants) dropped from 7.1% to 5.0% in 2023.
URA Realis Data showed that six non-landed properties at Watten House sold for at minimum S$5million in December of 2023.
HDB flats transactions may have declined in value, resulting in a lower demand for private housing.
He said that a lack of liquidity and a smaller budget would reduce the demand for upgrades in private housing.
Around 10,000 new homes will be available on the market this year after 20 new government-awarded projects are launched. URA figures showed that 7,911 newly launched units (including ECs), including new projects, were introduced last year.
Urban Redevelopment Authority (URA), Monday, Jan 15, released data showing 135 developers sold units in December 20,23.
December’s results were 83 percent lower than sales of 784 units in November 2023. They were also 21 percent lower than those of 170 units during the same period last year.
In January 2009, the number of units sold was 108. This month’s sales were the lowest since then.
Analysts anticipate that about 7,000 – 8,000 private homes will sold in 2030, up from 6,452 in 2023. But, it is still less than the 5-year average new developer sales, which was 9,763 units.
If the economy and interest rates recover, then sentiment may improve in H2 2020.
As many as 3,300 housing units from 13 projects will be on sale in the first three months.
