According to the latest data released by the URA on October 16, the sales of new private homes in Singapore hit a yearly low in September. Excluding Executive Condominiums, only 217 units were sold in September, representing a 44.9% decrease compared to the previous month. This marks the second consecutive month of decline in new private home sales and the lowest record since December 2022. This downward trend has drawn attention to the future trends of the real estate market.

One of the reasons for the decline in sales is the increased number of new project launches in the past few months, while developers have postponed the launch of some projects in the near term. This has led to an increase in supply, making buyers more selective in their purchases.

As the real estate market saturates, buyers are demanding higher quality and more desirable locations, leading them to prefer more attractive properties.

According to the data, the Core Central Region (CCR) accounted for 35% of the total sales, the Rest of Central Region (RCR) accounted for 33%, and the Outside Central Region (OCR) accounted for 32%. Among the new private home projects launched in September, sales decreased by 88.5% month-on-month, with only 68 units sold, significantly lower than the 590 units sold in August, indicating a sales rate of 319% in September, up from 67% in August.

In the Core Central Region (CCR), 21 units were sold at Pullman Residences, while Midtown Modern and One Bernam each sold 9 units. These three developments accounted for 51% of the total sales in the region in September. In the Rest of Central Region (RCR), Grand Dunman sold 16 units, The Reserve Residences sold 11 units, and The Continuum sold 10 units. These three developments accounted for 52% of the total sales in the region in September. Several other developments in the Outside Central Region (OCR) also had varying numbers of units sold.

Among the top ten projects in terms of sales, the median prices of six projects increased by 4.7% month-on-month, the median prices of two projects decreased by 1.3% month-on-month, and the prices of two other projects remained unchanged. This suggests relatively stable price fluctuations.

Another key observation is the change in buyers' demand for unit sizes.

The data shows that the share of units with an area of 1,000 square feet and above increased from 31% in August to 42% in September. Similarly, the share of units priced at 20 million Singapore dollars and above increased from 46% in August to 63% in September. This indicates an increase in buyers' demand for larger-sized private residential projects.

While the additional buyer's stamp duty (ABSD) hike earlier this year had some impact on the market, the demand from foreign buyers has gradually returned to normal since July. In September, the share of units purchased by foreign buyers in the overall sales of new private homes rose to 2.6%, up from 2% in August and 1.5% in July.

Meanwhile, due to the further widening price disparity between the Core Central Region and the Rest of Central Region, the proportion of purchases by foreign buyers in the Core Central Region has significantly increased from 2% in August to 2.9% in September. The data also shows that the median psf price in the Rest of Central Region decreased by 2.6% month-on-month in September to 2,546 Singapore dollars, while the median psf price in the Core Central Region increased by 9.8% month-on-month in September to 3,130 Singapore dollars.

Regarding the future sales trend, real estate researcher Tan Chin Boon remains cautiously optimistic. He expects a series of project launches in the fourth quarter of this year, leading to an estimated 6,500 to 7,500 units sold, slightly lower than the 7,099 units sold in 2022.

He pointed out that the relatively high interest rates in the second half of this year, coupled with weak economic prospects, will dampen housing demand. The number of resale private homes is expected to drop from 14,791 units in 2022 to 10,000 to 11,000 units. Additionally, the sluggish resale HDB market may also slow down the public's demand for private residential upgrades.

Tan anticipates that overall private residential prices may remain flat in the coming months. Despite a 8.6% increase in the third quarter of 2023 and a decrease in sales, he expects an increase of 3% to 5% in overall private residential prices after last year's 8.6% surge, indicating sustained growth.