Absence of new launches in October sees developers’ sales slip 6.5% m-o-m
By Timothy Tay
/ EdgeProp Singapore |
Lentor Hills Residences sold the largest number of units last month, moving 24 units at a median price of $2,116 psf. (Picture: Hong Leong Holdings)
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The absence of major new project launches last month saw the sale of new private residential units fall to just 203 units, according to the latest real estate statistics published by URA on Nov 15. This makes it the lowest monthly sales so far this year, slipping 6.5% m-o-m.
This momentary slump had been expected by market watchers such as Lee Sze Teck, senior director of research at Huttons Data Analytics, who observes that most buyers sat on the sidelines last month “waiting for hot launches in November... such as the highly anticipated launch of Hillock Green and J’den”.
The lull in new project launches in October mirrors a similar situation during the same period last year, when the only notable new launch was the 639-unit executive condo Copen Grand. On a yearly basis, developers’ sales for October 2023 represent a 35.4% dip from 312 units sold in October 2022.
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The pacing of new launches in 2023 seems to be a strategic move by developers “carefully spacing out their new project launches to maximise the impact and ensure optimal sales performance”, says Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors. He adds that this approach is driven by the need to prevent buyer fatigue and to allow potential buyers ample time to evaluate the available options.
As a result, new private residential unit sales last month were derived from already launched projects. City-fringe projects in the Rest of Central Region (RCR) contributed 40.4% of total developer sales last month.
Best-sellers
Based on the total number of units sold last month, the best-selling project in the RCR was The Reserve Residences which moved 23 units at a median price of $2,361 psf, followed by Grand Dunman which sold 15 units at a median price of $2,452 psf.
However, the project that sold the greatest number of units last month is Lentor Hills Residences, a suburban 598-unit development along Lentor Hills Road in the Outside Central Region (OCR). Last month, the 99-year leasehold condo saw 24 units sold at a median price of $2,116 psf. This means that the project is about 70% fully sold four months after it was launched in July.
Other projects in the OCR, including Lentor Modern and The Arden, in total accounted for 37.4% of all developer sales last month.
Meanwhile, sales in the Core Central Region (CCR) last month fell to its lowest level in more than three years, slipping 40.8% m-o-m to just 45 units sold. The top-selling project in this sub-market was Klint Cairnhill, which sold 11 units at a median price of $3,509 psf.
“Key reasons for the slower sales in the CCR include the paring down of unsold stock on the market, and limited new projects, as developers have largely held back on launching fresh CCR projects following the hike in the additional buyer’s stamp duty rates in April 2023,” says Wong Siew Ying, head of research and content at PropNex Realty.
All told, developers have launched about 7,300 new condo units over the first 10 months of this year, an increase of 69.3% over the same period last year. Meanwhile, home buyers snapped up 5,753 units between January and October 2023, which marks a 17.3% decline from the same period in 2022, according to statistics from ERA Realty.
What’s ahead
All eyes will now turn to the sales statistics for November 2023, which will likely be buoyed by strong take-up rates from the launch of J’den and Hillock Green.
The 368-unit J’den was launched on Nov 11 and sold 323 units (88%), making it the best-selling new launch so far this year in terms of launch-day take-up. The average selling price achieved was $2,451 psf.
The 474-unit Hillock Green was also launched on Nov 11. It saw buyers snap up 131 units (27.6%) with an average selling price of $2,108 psf. The project is jointly developed by a consortium of companies led by Soilbuild Group and its partner China Communications Construction, and Yanlord Land Group.
According to Lee, next month could see between 700 and 800 new units sold, before dipping to less than 200 units in December. “With 5,329 units sold in the first nine months of 2023 and potentially another 1,000 to 1,100 units in 4Q2023, developers are likely to end 2023 with sales of between 6,000 and 6,500 units,” he says.
“Going by buyers’ response and recent government land sale tenders, it seems that the residential property market is still relatively resilient, and market confidence remains intact even though sales have been muted in the past months,” says Wong. She adds: “The tepid primary market sales could be partly due to the paring down of unsold stock and limited number of smaller units available.”
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According to Tricia Song, head of research. Singapore and Southeast Asia, at CBRE, the pent-up demand in the market has been mostly absorbed and buyers are now spoilt for choice, given the pipeline of upcoming launches.
Looking ahead, several launch-ready projects are already in the pipeline for the first quarter of 2024. These include a boutique 35-unit project on Haig Road by developer Nanshan Group, as well as two projects by local developer Macly Group, the redevelopment of the former East Court on Koon Seng Road, and the redevelopment of the former Jansen Mansion on Jansen Road.
These are just a handful of the nearly 20 new projects developers are expected to roll out in the first six months of 2024, based on estimates by PropNex Realty. “With more new launches slated to come on in 2024, some buyers may be saving their bullets for these upcoming projects,” says Wong.
She adds that the first half of 2024 could see the launch of projects such as Hillhaven in Hillview Rise, The Arcady at Boon Keng, The Hill @ One North, Lentoria, Marina View Residences and Lumina Grand EC.
Song says: “Home buyers have become more price-sensitive amid the weaker economic backdrop and the slowdown in take-up at new launches could be reflective of resistance to the current high prices.” She adds that still-high interest rates and the upcoming December holiday season will contribute to relatively weaker market sentiment ahead.
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