New private home sales slump in June as developers hold off new launches over school holidays

Demand for new launches such as AMO Residence (pictured) could set new price benchmarks for the suburban area. PHOTO: UOL GROUP

SINGAPORE – Developers’ new private home sales slumped last month amid a dearth of new launches over the June school holidays and concerns over rising interest rates .

Just 488 residential units, excluding executive condominiums (ECs), were sold in June, down from 1,355 units a month earlier – the lowest sales since May 2020, when showrooms were shuttered by the circuit breaker.

It was also below the five-year historical average for June, noted Ms Tricia Song, CBRE’s head of research for South-east Asia.

New home sales excluding ECs fell 44 per cent in June, from 872 units a year ago. Including ECs, sales plunged 63 per cent to 496 units last month, from 1,375 in May.

This comes as developers held back launches during the June school holidays, which saw many Singaporeans joining in the rush for revenge travel after two years of border restrictions.

Only 397 new units – all from existing projects – were rolled out in June, compared with 1,240 in May, according to data released by the Urban Redevelopment Authority (URA) on Friday (July 13).

Given the recent interest rate hikes, some buyers may have taken a backseat, while others may be waiting for new launches, analysts said.

Sales in the upcoming months could get a lift from AMO Residence and Lentor Modern. Sales of AMO units, which start on July 23, are expected to be healthy given the lack of supply in the Ang Mo Kio area.

Mr Ong Teck Hui, JLL’s senior director of research and consultancy, called last month’s new home sales “a fair performance, considering the headwinds”.

June’s sales bring the second-quarter tally to 2,504 units sold, a 37.2 per cent increase quarter on quarter.

In the first half of the year, an estimated 2,647 new private homes were launched for sale – the lowest first-half-year launch figure in 18 years – since 2,080 units were launched in the same period in 2004, Mr Ong noted.

“This shows a high level of caution among developers, given the December 2021 cooling measures, macroeconomic uncertainties and rising interest rates,” he said.

But the successful launches of Piccadilly Grand and [email protected] in May are encouraging and more new launches are coming in the third quarter, he added.

Ms Catherine He, Colliers’ director and head of research for Singapore, expects new private home prices to continue to pick up pace as demand for new launches such as AMO Residence could set new price benchmarks for the suburban area.

She said demand could come from “HDB upgraders, en bloc beneficiaries or those downgrading from larger homes and are not affected by rising borrowing costs”.

“But with residential prices at a historic high, rising mortgage rates and the higher cost of living will further reduce discretionary income and home affordability,” she warned.

The top condo seller was Riviere, which saw 25 units moved at a median price of $2,856 per sq ft (psf), followed by Normanton Park, which sold 21 units at a median price of $1,864 psf.

Riviere saw 25 units moved at a median price of $2,856 per sq ft (psf). PHOTO: FRASERS PROPERTY

Based on quantum size, the largest proportion of new private homes sold, excluding ECs, were in the $1.5 million and $2 million range, accounting for 27.4 per cent of June’s total sales.

By market segment, June’s sales were skewed towards the prime district, which accounted for more than 42 per cent of total sales. This was followed by the city fringe, which accounted for 35 per cent, and the suburbs, which accounted for 22.7 per cent, CBRE said.

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