New home sales in Singapore continue to decline as developers hold back launches for the Chinese New Year.

Analysts predict that as March approaches, a more accurate “reflection” of buyer sentiment should be evident.

According to figures released by the Urban Redevelopment Authority on Friday (15 March), developers have sold 149 privately owned homes in the month of February. This represents a 47 per cent decrease from the 281 residential units that were sold in the previous month.

It’s also the lowest number of sales for February since 2008 – when developers sold only 174 units.

In February, 183 ECs and other units were sold. In January, 929 models were released and 588 of them sold.

The fall is mainly attributable to a lack of launches in major non-landed projects during the month. Developers have launched only 45 homes, nearly ten times less than last month’s 417.

This is also different from other property booms that saw developers rush to launch their projects after CNY. The absence of any new launches during the month of January shows that developers have chosen to wait until they find the perfect time for their new projects.

New home sales in 2023 were down 9.6 % from 2022, when they reached 7,099. This is due to repeated cooling measures as well as a softening in the economy and rising interest rates. As a result, buyers now are more selective amid the myriad of launch options and buyer fatigue. They also have a greater resistance to expensive price points.

As there were no launches during February, the majority of sales were generated by projects previously launched. These include the 512 Lumina Grand EC project in Bukit Btok that was launched in early January. This development was the best selling project in Feburary, with 16 apartments sold at a S$1,497 median price per square foot (psf).

The Botany Dairy Farm was the best-selling project (excluding ECs) with 386 units. 15 units were sold for a median cost of S$2,018 per sq ft.

Locals bought 14 of the units and a Singaporean permanent residence purchased the other.

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Three new homes were bought by foreigners in February. This is the lowest amount of foreign homebuyers for a whole month, ever since the Additional Purchaser’s Stamp Duties (ABSDs) were doubled to 60%.

Despite paying the high ABSD of 60 percent, these buyers still find value in their purchases. Terra Hill unit of 3,035 sf in RCR was sold for S$8.05 million. The buyer would then have had to pay S$4,000,000 ABSD.

URA’s figures also show that the sales of condos and private apartments were roughly equal in all three market segments.

The Outside Central Region and city fringe RCR each sold 58 unit, which accounted for 38.9% percent of sales. Core Central Region sold 33 units, which accounted for 22.1 per cent.

In the prime CCR price, the median fell by 3 %, mostly because of “thinnish sales volume” as well as a higher basis the month prior. Prices in February fell 0.5% in the RCR and 1.0% in the OCR.

Though sales have remained tepid so far, some analysts think that momentum is set to pick up with the launch a few major project in March.

This includes the Lentoria estate, which has 267 units and a 533-unit Lentor Mansion.

Lentoria sold over 50 units at its launch weekend in early March. This should increase sales in primary markets.

Lentor Mansion’s preview, which was held on the 16th of March, attracted a lot of interest and buyers are expected to respond well.

In comparison to February, which is a shorter month without any new launches, March’s market performance may reflect a more accurate buyer sentiment.

Analysts believe that new homes could sell between 7,000 and 8,00 in 2024. This is a marked improvement on the 6,421 housing units of the previous year. However, this still falls short of the five-year mean of 9,288.

In the short-term, lower macroeconomic indicators, cooling policies and higher interest rates will continue to impact the residential property market. However, this could change in H2 2020 if rates start to fall and the economy improves.