Summary
New private home sales in August significantly decreased, primarily due to the traditional belief against home purchases during the seventh month of the lunar calendar and other economic factors, including increased borrowing costs and economic uncertainty.
New private home sales in August significantly decreased
In August, developers sold only 394 new private residential units, marking a 72.1% drop compared to July’s sales figures and a 10% decrease year-on-year.
When including executive condominiums (ECs), a total of 649 units were sold in August, down from 1,471 units in the previous month.
The slowdown in August is attributed to traditional beliefs against home purchases during the seventh month of the lunar calendar, known as Ghost Month, which discouraged buyers.
Developers tend to avoid launching new projects in August, resulting in a 72% decrease in project launches compared to the previous month.
Homebuyers’ reticence is influenced by concerns about pricing, increased borrowing costs, economic uncertainty, and the availability of public housing options.
Foreigners’ purchases also declined, with only 12 units sold in August, down from 19 units in July, primarily in the Core Central Region (CCR) and Rest of Central Region (RCR) city-fringe locations.
We have read about how in a single weekend, only 52 units were sold across three new launch projects in Singapore.
The month’s most significant sales came from the sole EC launch, Altura, in Bukit Batok West Avenue 8, which sold 225 units out of 360.
Developers launched eight new private projects and one EC between July and August 2023, totaling more than 3,000 units.
With more new launches on the market, buyers are becoming more selective in their choices.
Home sales were distributed across different regions, with 48.7% in the Outside Central Region (OCR), 26.9% in the Rest of Central Region (RCR), and 24.4% in the Core Central Region (CCR).
Year-to-date, new home sales have decreased by 5.6% compared to the previous year.
Upcoming launches include Marina View Residences, Hillock Green, and J’Den.
Analysts expect 6,500 to 7,000 new private homes to be sold in 2023, compared to 7,099 units in the previous year.
Despite a 3.1% increase in private home prices in the first half of 2023, it’s predicted that prices will flatten out in the next few quarters.
A significant price correction is not expected due to low unsold inventory and healthy household balance sheets.
The forecast for 2023 is a 3% growth in private home prices, slower than the 8.6% in 2022, primarily due to a weaker economic outlook.
