Singapore home sales hit 8-year low amid tight supply

Singapore homes sales plunged to the lowest in eight years as a tight supply of new flats held back buyers.

Sales of new privately owned flats dropped to 259 units in November from 313 in October, Urban Redevelopment Authority figures showed on Thursday. That was the fewest since December 2014.

Despite the drop in transactions and moves to tighten housing loan limits, analysts expect underlying demand to remain strong and home values to rise next year. That contrasts with other key markets including Manhattan and London, where buying activity has eased on rising mortgage rates and home prices are correcting from their pandemic highs.

Builders have launched fewer projects this year, driven by a low supply of land for private housing development in 2020 and 2021. Singapore regularly releases state lands for sale to the private sector for residential and commercial development, in line with market demand.

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Some 4,024 private flats were put on the market in the first nine months, URA data show. That’s about half the number offered in the same period over the past three years.

“Most launched units have been sold, and the unsold balance of stock is currently very low,” said Christine Sun, head of research at OrangeTee & Tie.

To meet appetite from buyers, the government last week increased the supply of state land that can be sold in the first half of next year. The sites can yield up to 7,715 units.

About 33,600 private units and so-called executive condominiums, which are government-subsidised private flats for Singaporeans, will be completed in the next two years.

That’s higher than the 11,500 units built since 2021. The completions will help meet owner-occupier and rental demand in the near term, according to local authorities.