According to the latest data from the Urban Redevelopment Authority (URA), the first half of 2024 saw only 1,916 new private residential units sold, marking a 27% decline compared to the same period last year and the lowest half-year sales record since 2000.
One of the main reasons for this sluggish sales performance is the sharp decrease in new private residential supply. Only 1,938 new units were launched in the first half of the year, hitting a historic low over the past two decades. Developers have adopted a cautious approach amid current economic uncertainties and high construction costs, leading to supply shortages that have constrained market activity and consumer choices.
Despite the overall market weakness, there have been some positive signs in recent months. For instance, there was an increase in sales of larger-sized units in June, alongside a notable rise in interest from foreign buyers. This suggests that specific market segments, such as high-end residences and foreign investor markets, still exhibit demand and activity.
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Sun Yanqing, Chief Research and Strategy Officer at OrangeTide, highlighted the close correlation between the sharp sales decline and the drastic reduction in supply. She emphasized that developers' cautious stance reflects their cautious outlook on future market trends and uncertainties surrounding economic recovery speed and market demand.
Additionally, Zheng Weiming, Director of Research at Le Fang, noted that the entire second quarter was a traditionally slow period in the market, compounded by buyer concerns over future economic uncertainties, further dampening purchasing sentiment. Buyers are increasingly inclined to wait for more favorable market conditions before making decisions, further suppressing sales data.
In terms of market distribution, mass-market private homes outside the Central Region continue to be the primary source of sales. June's sales data indicated increased consumer interest in larger-sized units, demonstrating willingness to pay higher prices for quality housing despite overall modest sales levels.
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Regarding foreign buyers, June's data showed more than a doubling in their purchasing numbers compared to the previous month. This may reflect growing confidence among foreign investors in Singapore's long-term real estate market prospects, especially against a backdrop of economic stability and market recovery.
Looking ahead, market analysts generally expect private residential sales to improve in the second half of the year, with the launch of Build-To-Order (BTO) projects and intensified market competition. However, factors such as the "Hungry Ghost Festival" in the lunar seventh month and year-end school holidays may keep the market relatively subdued.
Despite facing multiple challenges, the potential for market recovery and growth remains viable, especially with potential government stimuli such as adjustments to land supply policies or tax incentives. Investors and homebuyers should closely monitor market dynamics and make prudent decisions based on their financial situations and market trends to seize potential investment opportunities and long-term growth prospects.
