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Property market August sales drops amid Ghost Month traditions

August brought a notable dip in Singapore’s property market, with sluggish sales attributed to traditional beliefs and concerns over property prices, as developers strategize for the coming months.

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SINGAPORE: The Singapore property market has witnessed a notable slowdown in sales for August, with developers selling just 394 new private residential units, marking a significant 72.1% drop compared to July. Additionally, this figure represented a 10% year-on-year decrease.

When considering executive condominiums (ECs) alongside private units, the total number of units sold in August amounted to 649, down from the 1,471 units sold the previous month.

These statistics, revealed by the Urban Redevelopment Authority (URA), reflect the common trend of August being a subdued month for property transactions. Traditional beliefs surrounding the lunar calendar’s seventh month often deter potential buyers.

Developers also adhered to this pattern by avoiding major project launches during August.

Despite the slowdown, 590 units were still introduced to the market, marking a 72% reduction from the previous month but a considerable increase from the 134 units launched in the same period the previous year.

Knight Frank Singapore head of research Leonard Tay, attributed the sluggishness in sales to multiple factors, including concerns over property prices relative to rising borrowing costs, economic uncertainty, and the availability of public housing options through Build-To-Order (BTO) launches.

Sales dynamics shifted significantly in August as developers recorded most new-unit sales before the onset of the Festival of the Hungry Ghosts on 16 August.

Notably, there were no transactions for residential properties priced at S$10 million or above during August, continuing the trend from July. However, June had witnessed two high-value transactions at Les Maisons Nassim, totaling S$32.7 million and S$30.8 million.

Huttons Asia senior director for data and analytics, Lee Sze Teck, pointed out that some buyers had adjusted their budgets in response to higher Additional Buyer’s Stamp Duty rates for investment properties and foreign buyers.

Foreigners’ property purchases dwindled to 12 units in August from 19 units in July, according to Urban Redevelopment Authority (URA) Realis data.

Half of these acquisitions occurred in the prime Core Central Region (CCR), with the other half in Rest of Central Region (RCR) city-fringe locations and suburban Outside Central Region (OCR).

The standout performer in August’s new home sales was the sole EC launch of 2023, Altura, in Bukit Batok West Avenue 8, which sold 62.5% of its 360 units.

According to Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, ECs continue to appeal due to their affordability and investment potential.

ERA’s key executive officer Eugene Lim, , highlighted that developers collectively introduced eight new private projects and one EC between July and August 2023, totaling over 3,000 units. He anticipates an additional 13 project launches by year-end.

The slow pace of August’s private home sales was attributed to the absence of major project launches during the month.

Notably, sales were primarily driven by four projects: Orchard Sophia, The Arden, The LakeGarden Residences, and TMW Maxwell.

With an influx of new properties entering the market, buyers now have a wider array of options to consider.

Propnex Realty head of research and content Wong Siew Ying, observed that several new projects in District 15, including Grand Dunman, may have revived interest in Liv @ MB, while TMW Maxwell likely attracted attention to One Bernam.

Categorised by region, 48.7% (192 units) of August’s sales transpired in the Outside Central Region (OCR), followed by the Rest of Central Region (RCR) at 26.9% (106 units), and the Core Central Region (CCR) at 24.4% (96 units).

Cumulatively for the year through August, new home sales reached 5,189 units, representing a 5.6% decrease compared to the same period the previous year, according to CBRE’s head of research for Singapore and Southeast Asia Tricia Song.

Upcoming property launches include Marina View Residences (with over 700 units), suburban project Hillock Green, and J’Den, the redevelopment of JCube mall.

CBRE predicts that private home prices, which saw a 3.1% increase in the first half of 2023, have likely peaked and are expected to stabilise in the coming quarters.

The absence of a significant price correction is anticipated, given low unsold inventory and healthy household finances, unless a prolonged recession and widespread job losses occur.

Song’s forecast for 2023 anticipates 3% growth in private home prices, a slowdown compared to the 8.6% growth witnessed in 2022, largely due to a weaker economic outlook, with official government forecasts indicating lower GDP growth rates than the previous year.

Huttons Data Analytics estimates developer sales of more than 5,200 private residential units in the first eight months of 2023.

With up to 10 new launches in the pipeline from October 2023, developer sales could end the year between 7,000 and 8,000 private residential units, still higher than 2022’s 7,099 private residential units despite the economic uncertainties.

Prices of new homes are likely to trend higher in 2023 on the back of imported inflation and high interest rates.

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