18-6-2024 (SINGAPORE) Singapore’s new-home sales market continued its downward spiral, with the latest figures revealing a second consecutive monthly decline as weak demand and a dearth of major launches weighed heavily on the sector. According to data released on Tuesday by the Urban Redevelopment Authority (URA), developers sold a mere 221 units in May, marking a significant drop from the 301 units sold in April and a staggering 79% decline compared to the same period last year.
The sluggish sales performance in the first half of the year has put the market on track for its lowest figures in over a decade, underscoring the challenges faced by the once-booming residential property market in Singapore. Analysts attribute this downturn to a confluence of factors, including high interest rates and government cooling measures aimed at addressing concerns over housing affordability.
Christine Sun, the chief researcher and strategist at real estate agency OrangeTee Group, expressed skepticism about a significant rebound in new-home sales in June, citing the typical family travel patterns during the month-long school holiday period as a potential hindrance to market activity.
The gloomy outlook has prompted real estate firm Knight Frank to revise its annual sales forecast downward, now projecting fewer than 7,000 new-home sales for the year, a sharp decrease from its initial estimate of up to 9,000 units. This revised projection underscores the depth of the market’s struggles, unless interest rates are cut or government measures are eased.
Despite the precipitous drop in transactions, home prices have remained stubbornly high, with private home values rising for three consecutive quarters. This resilience has been punctuated by occasional eye-catching transactions, such as the recent purchase of an apartment at the luxury Skywaters Residences development by a foreign buyer for a staggering S$47.3 million (US$35 million).
Amidst this challenging environment, developers have adopted a cautious approach, holding back on launching new projects. Last month, only 248 new private homes were released for sale, a stark contrast to the nearly 1,600 units launched a year earlier, according to URA data.
