Don’t read too much into Singapore’s June home sales slump: PropNex

There were barely any launches during the month, which caused the decline.

New private home sales in Singapore plummeted 73% q-o-q to 278 units in June, translating to a 43% year-on-year fall from 488 units sold in June 2022.

PropNex Singapore said this is not much of a concern, and reminded that developers’ sales are supply-led, typically driven by new launches that come on and may fluctuate substantially from month to month, depending on the availability of new projects in the given month. 

“Therefore, we would not read too much into the significant decline in new home sales from May to June, because of the dearth in project launches during the month – as developers held off on launches till after the June school holidays,” said Wong Siew Ying, Head of Research & Content, PropNex Realty. 

Here’s more from PropNex:

We anticipate new home sales numbers to shoot right back up again in July with several back-to-back launches - The Myst, Lentor Hills Residences, Grand Dunman, and Pinetree Hill. The four projects have collectively sold over 1,100 units during their respective launches over the 8 July and 15 July weekends. We expect OCR sales to pick up markedly in July on the sales at The Myst and Lentor Hills Residences, leaping from three months of double-digit transaction numbers as low unsold supply stymied sales. Meanwhile, RCR transactions will likely lead developers’ sales in July, driven by sales at Grand Dunman and Pinetree Hill.

Our observations suggest that there is still keen interest in new private homes amongst buyers and demand remains relatively resilient. Sales of new private homes from the July launches are also encouraging, drawing in buyers despite more new projects being lined up in August, and beyond. Some of the upcoming launches in August include Lake Garden Residences, Altura EC, TMW Maxwell, Orchard Sophia, and The Arden. With a steady pipeline of new launches to come, we expect the new home sales market to be lively, supported by sensitive pricing on the part of developers amidst the cautious sentiment, discerning buyers and continued high interest rates. 

In June, we note that about 4.8% of non-landed new private homes (ex. EC) sold have been purchased by Foreigners (non-PR) – up from the 3.0% in May 2023. While the proportion may be up as a percentage of total sales, the absolute number of non-landed new private homes sold to Foreigners in June was actually lower than the previous month - at 13 units (7 in CCR and 6 in RCR), compared to 30 units in May 2023. This is also the lowest number of such homes purchased by Foreigners since May 2020 (12 units), where the pandemic measures disrupted international travel and curtailed investment demand by foreigners.   

We expect developers’ sales to rebound strongly in July with the healthy demand for the four launches during the month. The sales momentum is also likely to spill over into August, particularly in the EC segment with Altura EC in Bukit Batok coming on – this could likely be the only new EC project that will hit the market in 2023 and should be well-received by eligible EC buyers. In addition, there have been no new EC projects in the Bukit Batok area for 22 years, with the last EC new launch being The Dew in Bukit Batok Street 21 in May 2001.