Commentary on Monthly New Home Sales for March 2024

Source: CBRE Research, URA
*Based on Realis new sales (excl. EC) caveats extracted on 15 Apr 2024. 

By market segment, Mar 2024’s developer sales (excluding ECs) were led by the Outside Central Region (OCR) due to the success of Lentor projects, selling 605 units or 84.3% of total March new home sales, up from 58 units (37.9%) in February. The Rest of Central Region (RCR) saw 66 sales (9.2%), up from 61 units (39.9%) in February 2024. Despite no new launches in March, Core Central Region (CCR) also saw better sales, selling 47 units (6.5% of March sales), compared to 34 units (22.2%) in February. The better performance of CCR launches came on the back of Cuscaden Reserve cutting prices by about 20% which may have triggered more buyer interest and bargain hunting in the CCR. 19 Nassim sold 11 units in March, its highest monthly sales, at a median price of S$3,304 psf. 19 Nassim has since sold 31 out of total 101 units.  Klimt at Cairnhill sold 8 units, highest since Oct 2023, at a median price of S$3,497 psf. We note that Leedon Green and Pullman Residences sold their last units in March, at S$3,135 and S$3,435 psf respectively.

Based on quantum size, the largest proportion of new private homes sold (excl. ECs) were in the S$1.50 mil - S$2.00 mil range at 31.7%. This was followed by the S$1.00 mil – S$1.50 mil bracket at 27.7%.

Outlook and forecasts 
2023 new home sales hit a 15-year low at 6,421 units, 9.6% below the 7,099 units in 2022 amid repeated rounds of cooling measures, a softening economic backdrop and elevated interest rates. Buyers have turned more selective amid a myriad of new launch options, buyer fatigue and increasing resistance to high price points.

Homebuyers’ tentative stance appears to have persisted in Q1 2024, with the tally of new home sales at 1,175 units, 6.4% lower y-o-y from 1,256 units sold in Q1 2023 despite more new launches (Q1 2024 saw 6 new launches vs 4 in Q1 2023). Negative newsflows from a slew of company layoffs, albeit globally could have further dented buying sentiment to start the year.

Looking ahead, 2 new city-fringe project launches are expected in Apr 2024. The former of which is freehold project The Hillshore (59 units) situated along Pasir Panjang Road which would be the maiden condo undertaken by local developer FRX Capital. The latter, The Hill @ One-North (142 units) sits on the Slim Barracks Rise (Parcel B) GLS site awarded in Oct 2021 to Kingsford Development could see healthy demand, following the success observed at the adjacent site launched at the end of Apr 2023 as Blossoms by the Park (275 units) which achieved 73% take up at an average price of $2,423 psf on the first day of sales. 

Overall, CBRE Research is cautiously optimistic on the private residential market in 2024. We expect forecast 7,000 – 8,000 new homes could be sold in 2024, an improvement from the 6,421 units in 2023 but still below the 5-year average new developer sales across 2019 – 2023 of 9,288 units. In the near term, downbeat macroeconomic conditions, cooling measures and elevated interest rates are likely to continue weighing on the private residential market but sentiment could improve in H2 2024 if interest rates ease and the economy recovers.

Correspondingly, private residential prices which are now up 1.5% based on Q1 2024’s flash estimate could rise at a slower pace in Q2 2024 before picking up again in H2 2024 if interest rates fall and the economy recovers. CBRE Research maintains our price forecast at 3 – 4% in 2024. A significant correction is not expected given still-low unemployment rate, resilient household balance sheets, and low unsold inventory.