Singapore new home sales hit 15-year low as high prices, interest rates cool market

The annual figure is the lowest since 2008, and is another sign of a cooling market that has so far avoided the worst of a global housing downturn

External demand has been hit after the government doubled housing purchase taxes for foreigners to 60 per cent last April

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Singapore new private home sales fell to the lowest in 15 years, as housing curbs and weakening economic conditions began to weigh on the market. Photo: Bloomberg

Published: 2:41pm, 15 Jan 2024Updated: 6:46pm, 15 Jan 2024

Singapore new private home sales fell in 2023 to the lowest in 15 years, as housing curbs and weakening economic conditions began to weigh on the market.

Just 6,671 units were sold by developers last year, figures released by the Urban Redevelopment Authority showed on Monday. December sales dropped to 135, less than a fifth of what was sold a month earlier.

The annual figure is the lowest since 2008, and is another sign of a cooling market that has so far avoided the worst of a global housing downturn, but is increasingly being dragged down by real estate purchasing curbs and a slowing economy.

The high prices of new launches together with a high interest- rate environment might be the main reason for lower new sales

Ken Foong, analyst

External demand has been hit after the government doubled housing purchase taxes for foreigners to 60 per cent last April. Citigroup Inc. expects developers’ margins from residential projects to decline further this year, partly due to a sizeable pipeline of about 44 projects.

Appetite for new homes will be tested further in January, with at least six launches slated for this month, according to real estate agency Huttons Group.

The slowdown in sales is dragging developers’ shares. City Developments Ltd., Singapore’s largest listed property firm, saw a 19 per cent drop last year, outpacing a fall in the country’s benchmark equity index.

“The high prices of new launches together with a high interest- rate environment might be the main reason for lower new sales,” said Ken Foong, an analyst with Bloomberg Intelligence. “Developers might need to moderate the selling prices to attract demand.”