Ghost Month: Developer sales are down 44.9 percent, fewer projects are launched

The amount of sales for private homes decreased in September because of the absence of new projects that were launched during the ill-lucky Hungry Ghost Festival.

Based on the information that was released on Monday (16th October) by the Urban Redevelopment Authority, developers sold 217 homes to private buyers in September. This is a drop of 44.9 percent from the 394 units that were relocated in August.

The latest sales report for September that excludes executive condominiums (ECs) is less than one-quarter of 987 units that were sold during the same time period in 2022. It is the least monthly sales number to date and also since December 2022 in which developers sold 170 units according to Huttons Data Analytics’ senior director Lee Sze Teck.

The first home sales for 2023 are expected to be 5,407 units which is less than the 6,409 houses that were sold in the same time frame the previous year. It is the lowest total for nine months since the year 2016 when a total of 5656 units were sold.

In September in September, including ECs 335 units were sold and 68 units launched. In August, 649 units were sold and 950 units launched.

It’s not a surprise that sales of homes fell after the Hungry Ghost Festival, which was over in mid-September.

Some buyers are reluctant to purchase homes during the holiday due to traditional beliefs. Developers are also advised against the launch of new ventures during this time.

In September, there was only one project was launched: The Shorefront on Jalan Loyang Besar (OCR), an 999-year leasehold development. Three units of the 23 were offered for sale at a price of S$1,902 for each sq ft.

The cooling measures that were implemented in April have contributed to “cloudy” and “slightly cold” buyer’s mood.

The rising additional Buyer Stamp Duty (ABSD) as well as the widespread economic uncertainty and inflation, and the growing amount of housing options for public like Build-to-Order, for instance are just a few of the factors buyers consider when weighing their options.

Because of the variety of goods available on the market, consumers are becoming more selective when it comes to their choices.

The ECs were the sole positive in the market, selling 118 units in the month of June. Demand for ECs is high, because buyers who are price sensitive want an alternative to buying a home. Buyers of ECs are also eligible to receive ABSD upfront Remission.

Altura Bukit Batok was the sole EC-project to be that was launched in the year 2000. Altura’s total sales topped an 88 percent rate. Altura was also named the most popular project to sell in September and sold units at an average of S$1,473 per sq ft.

Altura also established an industry benchmark in the EC market in the last month, by selling an area of 980 square feet at S$1.6m or S$1,585 per sq ft. The previous record for Copen Grand’s psf was S$1,499 for a square foot.

Pullman Residences is a freehold development located in Newton, came second with 21 units, which is the median price of S$3,258 per square foot. Core Central Region (CCR) is, of the three segments did “relatively” better than the other segments. The 76 units that were sold in the CCR comprised 35 percent of all condo and private apartment purchases in September.

In the OCR the OCR, sales of properties decreased by 64 percent month-over months to a total of 70 units. For the Rest of Central Region, it dropped 33 percent between the months.

Analysts predict that the next few years is likely to be a slow one for buyers and developers due to the rising rates of interest and uncertainty in macroeconomics.

The increasing geopolitical tensions across the globe and the possible effects of the conflict in the Middle East may also dampen the spirit of the market for real estate.

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The OCR will be the center of the majority of major projects launched within the next few months. The 265-unit Lentoria and the 474-unit Hillock Green are both part of the brand new Lentor Hills Estate. In Jurong in Jurong, the J’den Condo, which is located in the site of the former JCube Mall, will comprise 368 units. The 440-unit Sora condominium, located at Yuan Ching Road, will also be constructed. The 341-unit Hillhaven is situated in Hillview Rise.

Developers will need to be cautious when pricing these new projects in order to guarantee the volume of sales. There won’t be any major price cuts since the developers are already made commitments to capital expenses.

Market watchers anticipate that the amount of new homes that are sold privately this year, not including ECs is expected to be between 6,000 and 7,000 units, which is a bit lower than the previous year’s 7,099 units sold.

Developers can decide to postpone launch until 2024, after which rates are expected to stabilize and the mood improves due to lower sentiment and the nevertheless high interest rates, as well as due to the holiday season in December.

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