In May 2024, Singapore’s real estate market experienced a significant slowdown, with new private home sales reaching their lowest point in three months, which is the third month in a row. According to the Urban Redevelopment Authority (URA), developers only sold 221 units, a significant decline from the 301 units sold in April. This drop has been attributed to a limited number of new project launches and the high prices of available projects, such as the upscale Skywaters Residences. Wong Siew Ying, Head of Research & Content at PropNex Realty, pointed out that prospective buyers might be delaying their purchases in anticipation of more affordable options in the future.
Low expectations for Q2 property sales in Singapore
The outlook for Q2 2024 remains grim. PropNex Realty predicts that new private home sales could be lower than Q1 2024, which saw 1,164 units sold. The usual slowdown during the school holidays, when many families travel abroad, is expected to contribute to this decline. Furthermore, Q2 2023 recorded 2,127 units sold, a benchmark that seems complicated to achieve given the current market conditions. The shortage of new project launches continues to have a significant impact on sales figures.
Anticipated activity in Q3
In Q3 2024, we anticipate a potential turnaround despite the current slowdown. This is due to the upcoming entry of several medium to large projects into the market. These projects include the 440-unit Sora in Jurong East and the 276-unit Kassia in Flora Drive, as well as significant developments such as Emerald of Katong, Meyer Blue, The Chuan Park, and the Bukit Timah Link project.
It’s worth noting that developers are likely to abstain from launching new projects during the Ghost Month (August 4 to September 2), as this period is traditionally considered inauspicious for property transactions. The anticipated increase in activity is expected to breathe new life into the market, providing more options for buyers and potentially driving up sales.
Continued demand for existing projects
In May 2024, Lentor Hills Residences was the best-selling project, and other Lentor developments such as Hillock Green, Lentor Mansion, and Lentoria also made it to the top-10 sales list. Collectively, these Lentor developments, along with the integrated Lentor Modern project, have sold about 75% of their total units (1,855 out of 2,477), based on URA Realis caveat data up to June 9. This steady absorption rate alleviates initial concerns about a potential supply glut in the neighborhood. Furthermore, a project in Lentor Central, capable of yielding an estimated 475 units, is yet to be launched after the site was awarded in September 2023.
What the market’s slowdown means for (potential) property buyers in Singapore
For property buyers, the current market conditions may offer an opportunity to negotiate better deals on existing projects, due to reduced competition and developers’ eagerness to sell unsold units. However, those seeking new launches might find limited options until Q3 2024. Property owners should be aware of potential market fluctuations and may consider delaying the sale of their property until the market stabilizes with the anticipated new launches in the latter part of the year. The ongoing demand for existing projects, especially in desirable locations like Lentor, suggests that well-positioned properties will continue to attract buyers, even in a subdued market.
The near-term future of Singapore’s real estate market seems tough, but the anticipated introduction of new projects later this year could stimulate a market recovery, benefiting both buyers and property owners in the long run.
