Analysts believe that the lack of new projects in the market and the implementation of the cooling measures were the main reasons for the decline in sales last year, while rising mortgage rates added to the problem of new private home sales.

Commenting on the trend of the new private residential market this year, ERA's Head of Industrial Research and Consulting, Mr Mak Chun-wing, said that despite the economic uncertainties this year, the 30 to 40 private residential projects that developers are likely to launch will provide 10,000 to 12,000 units for the market.

He predicted that sales could reach 9,000 to 10,000 units this year.

Local sales of new private homes continued to decline in December last year, down 34.6 per cent year-on-year to 170 units, and for the year as a whole, new private home sales fell 45.1 per cent from the previous year to 7,153 units.

Analysts cited a lack of new projects and the implementation of cooling measures as the main reasons for the drop in sales last year, while rising mortgage interest rates added to the problem of new private home sales.

According to the latest figures released by the Urban Redevelopment Authority (URA) on Monday (January 16), excluding the implementation of condominiums (ECs), the number of residential units launched by developers in December fell sharply by 85.9 per cent year-on-year to 45, with 170 units sold, down 34.6 per cent from 260 in November and the lowest level in 14 years.

Year-on-year, sales fell by almost 74 per cent from the 650 units sold in December of the previous year.

By region, the Core Central Region (CCR), representing upmarket private housing, had the highest number of private homes sold, with 89 units. Private home sales in the Other Central Region (RCR), representing mid-range private homes, and Outside Central Region (OCR), representing mass market private homes, were 54 and 27 units respectively.

ERA's Head of Industrial Research & Consultancy, Mr Mak Chun-wing, cited school holidays and limited launches of new projects as the main reasons for the sharp drop in sales in December. In addition, buyers wanted to wait for more projects to be launched in the coming year before making their choice.

Sun Yanqing, Head of Industrial Research and Consultancy at OrangeEase, said that for the whole of last year, sales of new private homes reached 7,153 units, down 45.1 per cent year-on-year, which was the lowest level since the global financial crisis in 2008.

Apart from a lack of supply in the market, the two cooling measures in December the year before and September last year, as well as high mortgage rates, also played a big role in the decline in sales.

When EC is included, new private home sales rose 43% to 638 units in December from a year earlier. Of these, EC's Tenet in Tampines sold 451 units during the month.

Mohan Sandrasegeran, senior analyst at One Global Group Research, said the lower-priced EC made it less affordable for buyers at a time when lending rates were rising.

The exemption from the Additional Buyer's Stamp Duty (ABSD) and the Deferred Payment Scheme are the two main advantages that attract buyers to EC, said Sidney Lee, senior research director at Hopedale Group.

On the trend of the new private residential market this year, Mr Mak said that despite the economic uncertainties this year, the 30 to 40 private residential projects likely to be launched by developers will provide 10,000 to 12,000 units for the market. More supply will attract buyers back to the market.

He expects sales to reach 9,000 to 10,000 units for the year as a whole, although the exact number of units sold will depend on macro factors such as employment and lending rates, as well as the trend in prices of new private homes.

According to CBRE's Head of Research for Southeast Asia, Song Mingwei, new private sales will pick up after Chinese New Year as several new projects are launched in the first quarter.

Between 7,500 and 8,500 units are expected to be sold for the year as a whole. With the economy remaining stable, factors such as reduced private housing stock and rising rents will push prices up by 3 to 5 per cent for the year.

While interest rates will remain high this year, buyers who are banking on a slowdown in interest rate growth and a drop in interest rates next year may choose to buy this year to avoid a surge in demand that could push up prices when interest rates drop, said Wong Sau Ying, head of research and content at Bona SpA.