Property market set to log lowest sales since GFC: analyst

Only 2 of 8 major projects sold over 50% of their units during their month launch.

Singapore’s property market is possibly headed for its lowest sales volume ever since the 2008 financial crisis.

Developers are expected to sell up to 5,000-5,500 new homes in 2024, with price increases possibly falling between 0% to 4%, various property analysts said.

If the volumes are correct, this will be the lowest sales since the Global Financial Crisis (GFC), when only 4,264 units were sold in Singapore, said Mark Yip, CEO, Huttons Asia.

In Q3 2024, prices of private homes declined 1.1% in Q3, according to data from the Urban Redevelopment Authority (URA). This is the biggest drop since 2016, when prices fell 1.5%. 

Volume-wise, sales are 11% lower in Q3 compared to the previous quarter.

Between January to August 2024, only 2 of 8 major projects managed to sell over 50% of their units during the month of their launch, said Wong Xian Yang, head of research, Singapore & SEA at Cushman & Wakefield. 

In contrast, 6 out of 14 major new launches sold more than half of their stock in the first eight months of 2023, Wong said.

Buyers exhibited ‘more caution’ during the quarter, said Christine Sun, chief researcher & strategist, OrangeTee Group.

“Many consumers may have exhibited greater caution in their purchasing decisions, as they were more restrained in their affordability due to the elevated cost of living and interest rates,” Sun said. 

“Others could have refrained from making purchases as they were anticipating a potential decrease in interest rates to be declared by the Federal Reserve in September,” she added.

Buyer fatigue due to back-to-back new launches may also be to blame, said Tricia Song, CBRE head of research, Southeast Asia.

“A more significant rebound in new developer sales…is likely to occur only in 2025 when more clarity is reached on the global economic condition,” Song said.

However, even with the Federal Reserve’s interest rate cut, analysts do not expect an immediate surge in home buying.

Song said that most financial institutions have already factored in the interest rate adjustment in their mortgage plans.

“However, should the Federal Reserve continue to lower interest rates in the coming months, buying sentiment is expected to improve as housing becomes more affordable,” Sun said.

A further decrease in interest rates may also spur individuals to consider buying larger homes or properties in upscale locations, she added.