Property sales in Singapore expected to be worst year since financial crisis

By: Low De Wei

(Bloomberg) — New home sales in Singapore this year are likely to fall to their lowest since the global financial crisis, property consultancy firms said, revising their forecasts downward after another month of weak transactions.

Developers sold fewer than 2,700 units this year through August, according to Bloomberg calculations based on Urban Redevelopment Authority figures. CBRE Group Inc. and Jones Lang LaSalle Inc. now expect the 2024 total to fall below last year's 6,421 units, the lowest since 4,264 units in 2008.

The financial centre has been struggling with falling new home sales for months as a standoff develops between developers and buyers. Developers are reluctant to cut prices while simultaneously restricting supply, forcing potential buyers to turn to the resale housing market or wait until borrowing costs come down before jumping in.

Homebuyers remain “quite interested” in purchasing homes if resale property prices meet their expectations, Chia Siew Chuin, head of residential property research at JLL in Singapore, wrote in a note. However, some are “cautious and holding back as they anticipate possible interest rate cuts,” she said.

Forecasts lowered

Only 208 new homes were sold last month, URA figures showed on Monday, a record low for August based on available data going back to mid-2007.

In a month when some Singaporeans believe the spirits of the dead haunt the living, developers seemed unsettled by the market situation and no major projects were launched.

Despite the slowdown, home prices have risen for four consecutive quarters, posing a headache for the government in one of the world's most expensive property markets. Even restrictions on the property market, including a 60 percent stamp duty on purchases by foreigners last year, have not yet curbed prices, although sales are falling.

Expectations that homebuyer sentiment may be changing have prompted developers to resist price cuts. None of real estate company executives surveyed in a quarterly survey conducted in June expected prices for new housing units to decline in the second half of the year, while 25 percent expected them to continue rising.

Citigroup Inc. sees “no reason” to downgrade its expectation that developers will sell 4,500 to 5,500 housing units this year, even if interest rates begin to fall, analyst Brandon Lee wrote in a note Monday.

For more articles like this, visit bloomberg.com

©2024 Bloomberg L.P.