Singapore's property market experienced a significant decline in home sales, reaching its lowest level since December, due to the absence of notable property launches and the government's cooling measures. The number of new private flats purchased in June dropped to 278 units, indicating a potential moderation in the previously red-hot property market. However, analysts anticipate an upturn in the market with an increase in housing supply and several major developments set to be launched in the coming month. While measures have reduced foreign homebuying interest, local residents continue to show interest in the property market, supporting demand for their own occupancy.
Last month, Singapore experienced a significant decline in home sales, reaching the lowest level since December. This decline can be attributed to two main factors: the absence of notable property launches and the implementation of the government’s latest cooling measures, which deterred potential buyers from making purchases.
According to the Urban Redevelopment Authority’s data released last week, the number of new private flats purchased in June dropped to 278 units, a significant decrease from the 1,038 units sold in the previous month. This figure represents the lowest level of home sales since December 2022 when only 170 homes were sold due to limited supply reducing demand.
The slump in sales indicates that Singapore’s previously red-hot property market might finally be showing signs of moderation. Despite the global slowdown affecting real estate markets in various countries, Singapore had remained resilient. However, the recent implementation of property curbs led to the first decline in private home prices in three years during the second quarter.
According to Christine Sun, the senior vice-president of research and analytics at OrangeTee & Tie, analysts anticipate an upturn in the Singapore market due to an increase in the housing supply. Last month saw a meagre launch of only 17 units, but in July, the situation is expected to change as several major developments like Lentor Hills Residences and The Myst are set to be launched. As a result, new home sales are likely to rebound in the upcoming month.
The government has stated that approximately 20,000 public flats and 19,000 private housing units will be completed by the end of this year, and a combined total of 31,000 units will be added in 2024.
In April, the government implemented measures to curb foreign homebuying demand, including doubling stamp duties for foreign buyers to 60 per cent, the highest rate among major markets, and increasing levies for second-home buyers. According to Nicholas Mak, the chief research officer at real estate platform Mogul.sg, these measures have significantly reduced foreign homebuying interest.
On the other hand, local residents searching for homes to live in have been less affected by these measures and continue to show interest in the property market.
Nicholas Keong, head of residential and private office at Knight Frank Singapore, stated that local buyers with ambitions and sufficient financial means will remain actively engaged in the upcoming new property launches.
He believes that the demand for these units throughout the rest of 2023 will primarily come from homebuyers purchasing homes for their own occupancy. This demand is expected to be supported by the fact that household finances remain stable and healthy.
With an increase in housing supply, it is likely that prices will be kept in check. According to Bloomberg Intelligence, the growth of Singapore’s private-home prices is projected to slow down to less than 2 per cent in the second half of the year, following a 2.9 per cent increase in the first half, resulting in an overall gain of up to 5 per cent for the entire year.
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