Singapore home sales tumbled for a third straight month to the lowest in almost 14 years as a supply crunch kept buyers at bay.
Purchases of new privately owned apartments fell to 170 units in December, from 259 the previous month, Urban Redevelopment Authority figures showed Monday. That’s the lowest since January 2009, when 108 homes were sold after the global financial crisis affected buyer sentiment.
“The lackluster new sales could possibly be attributed to the year-end traditional seasonal lull period and a lack of new launches in the month,” said Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty Ltd. unit ERA. The holiday period also contributed to slower activity across the housing market as many decision-makers were on vacation, he added.
Even with the recent drop in transactions, Singapore’s housing market is showing signs of growth, with sales and prices expected to rise in 2023, albeit at a slower pace. That’s in contrast with housing markets elsewhere, from Canada to Sweden, that have been hurt by interest-rate hikes. US home prices are expected to decline this year for the first time in more than a decade.
Analysts expect the Singapore market to pick up as the supply of homes rises. As many as seven projects with more than 500 units may be launched this year, compared with just one in 2022 and four in 2021, said Christine Sun, senior vice president of research and analytics at OrangeTee & Tie. More housing options may alleviate price pressures, she said.
About 33,600 private units and so-called executive condominiums, which are government-subsidized private apartments for Singaporeans, are slated for completion by the end of next year, which will help meet owner-occupier and rental demand, according to local authorities.
A resilient property market, growing household income and low unemployment rates should lead to higher prices this year, said Mak. Resale transaction volumes of private properties are expected to remain stable, while residential leasing is forecast to climb, he added.
Home prices are projected to rise 5% to 8% in 2023, while rents are set to climb another 13% to 16% this year, according to Sun at OrangeTee & Tie. –BLOOMBERG