July new private home sales jump fivefold; but souring economy could stymie momentum in August

The number of units launched in July jumped to a 2½ year high of 2,156 units. ST PHOTO: CHONG JUN LIANG

SINGAPORE – Developers’ sales more than quintupled to a near two-year high of 1,412 private residential units in July, turbocharged by four non-landed project launches that month.

But some analysts warn that the lacklustre performance of five other new launches so far in August, amid a souring macroeconomic environment, higher interest rates and property curbs, could foreshadow slower sales in the coming months.

The rebound in July’s new private home sales from just 278 units in June was fuelled by four launches – Grand Dunman, Lentor Hills Residences, Pinetree Hill in Ulu Pandan and The Myst in Upper Bukit Timah – which collectively accounted for about 82 per cent of sales.

On a year-on-year basis, sales were up by 69 per cent from 836 units in July 2022.

Including executive condominiums (ECs), July’s sales jumped 395 per cent to 1,471 units, from 297 in June, and up 73 per cent from 848 a year ago. There were no ECs launched in July.

The number of units launched in July jumped to a 2½-year high of 2,156 units, from just 31 units in June, and surged 428 per cent from 408 units a year ago, according to data released by the Urban Redevelopment Authority on Tuesday.

In the first two weeks of August, five new projects – Altura (EC), Orchard Sophia, The Arden, The LakeGarden Residences and TMW Maxwell – were launched as some developers rushed to put out their projects before the Hungry Ghost month starts on Wednesday, Huttons Asia senior research director Lee Sze Teck noted.

While July’s sales had been stellar, sentiment has softened significantly in view of weaker sales so far for these five August launches, said Ms Tricia Song, head of research for South-east Asia at CBRE.

Altura sold 220 units (61 per cent) and The LakeGarden Residences moved 71 units (23 per cent), while the three other new launches over the past weekend managed to sell only a total of 53 units, Ms Song noted.

“The worst-performing projects were in the prime district – Orchard Sophia sold 19, or 24 per cent, of its 78 units and TMW Maxwell sold seven, or 2 per cent, of its 324 units. The Arden in the suburbs sold 27, or 26 per cent, of 105 units,” she said.

“We believe pent-up demand has been mostly absorbed, and genuine buyers are spoilt for choice.

“Prices have moved up significantly. Some projects that are targeted at investors or foreign buyers will face some resistance after the additional buyer’s stamp duty was hiked to 60 per cent for foreigners,” Ms Song said.

Edmund Tie’s head of research and consulting Lam Chern Woon noted that take-up rates for new launches, at 66 per cent in July, were broadly similar to that of May, which saw take-up rates of 65 per cent.

But these take-up rates are “markedly lower than those in the first part of 2023, which were closer to 100 per cent”, he said.

Mogul.sg chief research officer Nicholas Mak said high take-up rates for new launches may not be sustainable.

“Based on the sales performance of three residential projects launched over the Aug 12 weekend, such as TMW Maxwell, homebuyers are becoming more selective and price-sensitive,” he said.

“Furthermore, the new record prices of some new launches are beyond the reach of most HDB upgraders, who typically prefer to buy three-bedroom units for their families”, Mr Mak added. “Foreign demand is needed to absorb the new supply of expensive homes, especially those in the prime district and the city fringe.”

But Mr Lam noted that the share of private home purchases by foreigners, post-April’s round of cooling measures, dropped further to 1.5 per cent in July, from 2.4 per cent in June and 3.7 per cent in May.

In particular, the share of foreign purchases in the city fringe fell more significantly to 1.5 per cent in July, from 2.7 per cent in June, he said.

Meanwhile, the city fringe accounted for 59 per cent of total new sales in July, due to strong sales at Grand Dunman and Pinetree Hill, while the prime district accounted for the remaining 6 per cent, and the suburbs, 35 per cent.

The 1,008-unit Grand Dunman was the top seller in July, moving 549 units at a median price of $2,519 psf, while Pinetree Hill sold 150 units at a median price of $2,360 psf, PropNex said.

New private home sales in the suburbs skyrocketed to 488 units in July from just 19 in June, due to Lentor Hills Residences, which sold 333 units at a median price of $2,107 psf, and The Myst, which transacted 127 units at a median price of $2,056 psf.

An absence of new launches in the prime district resulted in a 21 per cent drop in July’s sales to 88 units month on month – the lowest monthly tally for this segment since 89 units were transacted in December 2022, PropNex said.

PropNex head of research and content Wong Siew Ying expects that transactions (excluding ECs) could ease in August, due to fewer units offered that month, especially after the start of the Hungry Ghost month and as buyers take their time amid ample new supply.

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