New home sales in Singapore declined in February, as developers delayed launches to coincide with the Chinese New Year (CNY).

Analysts say that a “more accurate reflection” of the buying sentiment will emerge in March, as major launches begin to roll out.

The Urban Redevelopment Authority released data on Friday (15 Mar) showing that developers had sold 149 homes in February. This is 47 percent less than the 281 private homes they had sold in January.

This figure, excluding executive condos (ECs), represents around a third the number of 433 units that were sold in February 2023.

This is the lowest February sales figure since 2008 when developers sold 174 apartments.

In February, 183 units (including ECs) were sold. Comparatively, in January 929 units had been launched and 588 were sold.

This is due to the fact that there were no major launches during the month. Just 45 units were launched by developers, a drop of nearly 10 times compared to the 417 units that were released in the previous month.

It is also a vastly different situation from the previous booms in property, when developers would rush to launch residential projects within a few days of CNY. Last month, there were no new launches. This shows that developers prefer to wait for the best time to launch their new projects.

In 2023, new home sales were at a 15-year record low of 6,421 homes. This was a 9.6 percent drop from the 7,099 homes sold in 2022. The repeated cooling measures, the softening of the economic climate and high interest rates were all factors. The buyers are more selective due to the new launches, fatigue of buyers and resistance to high prices.

The majority of sales in February were made from projects that were already launched. These include the 512 unit Lumina Grand EC, launched in Bukit Batok in January. This was the most popular project in February with 16 units selling at a median of S$1,497 psf.

The Botany at Dairy Farm, a 386-unit project with 15 units at a median of S$2,018 psf was the most popular project.

The majority of the transactions were made by locals, with 14 units sold. One unit was bought by a permanent resident from Singapore.

Read more: The Chuan Park condo

In February, only three new homes were purchased by foreigners. The number of foreign buyers has dropped to its lowest level in a single month, since the additional buyer’s stamp duty (ABSD) was increased for them from 40% to 60%.

These buyers are still happy with their purchases despite having to pay the 60 percent ABSD. Terra Hill, in the Rest of Central Region(RCR), sold a 3,035-square-foot unit for S$8.05 million. This meant that the buyer was required to pay S$4,000,000 in ABSD.

URA data shows that the condo and private apartment segments were also fairly equal across all three market segments in December.

Both the Outside Central Region (OCR), and the city fringe RCR, sold 58 units each, representing 38.9% of total sales. In the Core Central Region, 33 units were sold. This represents 22.1% of all new sales.

The median price in the prime CCR fell by 3 percent, mostly due to a “thin” sales volume and a higher baseline the previous month. In February, prices fell by 0.5 percent in the RCR as well as 1 percent in the OCR.

Analysts predict that momentum will pick up in March, despite the tepid sales so far.

Two of these are located in Lentor Hills – the Lentoria and Lentor Mansion, both with 533 units.

Lentoria sold fifty units in its first weekend of launch in March, which is expected to support sales in the primary market.

Lentor Mansion has also attracted positive interest in its preview. It is expected that buyers will respond positively to the property.

Since February is a shorter period with few new products, the market performance in March could be a better reflection of buyer sentiment.

Analysts predict that between 7,000 and 8,000 new houses could be sold by 2024. This is an increase from the 6,421 units sold in the previous year, but it’s still lower than the average for the past five years of 9,288.

The private residential market will continue to be impacted by the macroeconomic downturn, cooling measures, and high interest rates in the short term. However, sentiment may improve in H2 of 2024, if the interest rates drop and the economy begins to recover.