Here's why January had the lowest private home sales in 15 years

A few weeks back, we discussed how the HDB resale market in January saw the highest million-dollar sales in history, totaling to 74 transactions. However, while the public housing sector flourished, the private home sales segment painted a starkly different picture.

In this article, we're taking a look at the private home sales for the same month, uncovering the reasons behind its unprecedented dip.

Sales performance in January 2024

In January 2024, the private home sales volume hit a significant low, recording the lowest figures seen in 15 years.

Despite this sobering statistic, there was a notable upswing in new private home sales, more than doubling from December last year.

Excluding executive condominiums (ECs), developers managed to move 281 units, representing a staggering 108.1 per cent increase from the previous month, albeit signalling a 28.7 per cent decline from January 2023.

Breaking down sales figures over CCR, OCR, and RCR

Of the total sales, 25 units were located in the Core Central Region (CCR), 112 units in the Rest of Central Region (RCR), and 144 units in the Outside Central Region (OCR).

What drove private home sales to double in January?

The surge in sales compared to December can be attributed to the continuation of property launches following a slight pause over the year-end holidays.

Notably, developers unveiled two major non-landed projects, Hillhaven and The Arcady at Boon Keng, in January 2024. These launches significantly bolstered the number of available units, consequently driving up sales figures compared to the preceding month.

Then why the overall drop in sales?

Despite the surge in January, various factors continue to impact buyer sentiment, leading to an overall drop in sales.

Market cooling measures, economic uncertainties, high interest rates, and lofty prices contribute to this sentiment.

However, there's a silver lining among this.

Amidst these challenges, positive trends such as low unemployment and anticipated improvements in the economic and interest rate environment in the second half of 2024. This is expected to bolster buyers' confidence in the prevailing market conditions.

In fact, more young Singaporeans are taking loans to buy private homes despite the elevated interest rate environment. According to ERA, the number of private home buyers aged between 26 and 35 has tripled since 2015, accounting for 35 per cent of new private home transactions in Singapore last year.

What's the private property market outlook for the rest of 2024?

Looking ahead, sales are expected to dip in February due to the absence of major launches and the Chinese New Year period.

However, a surge is anticipated again in March and April, with several eagerly awaited project launches scheduled during this period. These include launches from Arina East Residences, Ardor Residence, The Hillshore, Koon Seng House, Lentoria, Lentor Mansion, and The Hill @ One-North.

Despite the slow start in January, projections suggest a sales volume ranging between 7,000 to 8,000 units for the year, accompanied by a modest three per cent to five per cent increase in property prices.

ALSO READ: Navigating housing policies for seniors in Singapore (wait-out-period exemption)

This article was first published in 99.co.