Lack of new launches to dampen new home sales in June

Home sales should remain firm throughout the year.

New home sales are expected to record a drop in June, but a number of high-profile projects slated for launch in the coming months to boost overall sales in 2023, according to property analysts.

OrangeTee&Tie, Knight Frank, and Edmund Tie & Company all estimate the volume of new home sales will range between 7,000 to 8,000 units in 2023.

“With the government reporting that 90% of private home buyers comprise citizens and permanent residents buying their first property, demand for new product will continue to be firm throughout 2023 as new projects are launched, so long as the price points are within the affordability levels of this type of buyer,” said Leonard Tay, Head, Research, Knight Frank Singapore.

On a monthly basis, sales are expected to drop in June due to the lack of new launches, said Christine Sun, Senior Vice President of Research & Analytics, OrangeTee & Tie.

In comparison, May featured two high profile developments launching: The Reserve Residences on Jalan Anak Bukit, and the Continuum on Thiam Siew Avenue.

“Thereafter, some high-profile projects are slated for launch in the coming months, including Lentor Hills Residences and Grand Dunman,” said Sun. 

Some developers may also bring forward their project launches before the lunar seventh month, which may boost new home sales, she added.

ALSO READ: New home sales up 16.1% to 1,055 in May

Foreigners adapt “wait and see approach”
Potential foreign homebuyers are expected to adopt a wait-and-see posture as they assess the impact of the new cooling measures, according Tay. Singapore’s status as a safe haven, however, may still push them to invest in property despite the higher stamp duty.

“Nevertheless, as the world increasingly becomes blighted with economic and political uncertainty, some of the globally mobile wealthy might still invest in the stability of prime homes in Singapore as a hedge against global volatility,” Tay said.

Pricing to determine sales
There could be as much as another 2,000 new home sales in the primary market segment, depending on marketing strategies and pricing of upcoming launches, said Lam Chern Woon Head of Research and Consulting, EDMUND TIE.

“Looking at primary market performance for this year hinges on the reception for the next few major launches lined up such as Lentor Hill Residences in the OCR, and Pinetree Hill and Grand Dunman in the RCR,” Lam said.

ALSO READ: New home sales up 16.1% to 1,055 in May

However, the tight financing environment will continue to cap housing budgets.

“Secondary home sales have fallen while median prices have been trading sideways for the past four months. Overall private home prices are likely to rise by a sustainable pace of 4-6% in 2023,” he said.

Knight Frank’s Tay said that there should be an estimated 8,000 units left to launch in the remainder of 2023.