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Property Herald: Overall Residential Property Demand is Weakening Even as Sales Picked Up with New Launches

Overall residential property demand is weakening even as sales picked up with new launches
Overall Residential Property Demand is Weakening Even as Sales Picked Up with New Launches

Residential primary market launch & sales


After releasing just 36 private housing units in December 2023, real estate developers launched 417 private housing units and 512 Executive Condominium (EC) units in the first month of this year.


As a result, the developers’ sales of private housing units almost doubled from 135 units sold in December to 281 private units last month.


The number of EC units sold in the primary market also jumped from 17 units sold in December to 307 units sold in January 2024. Out of the 307 EC units sold last month, 88.3% of the units sold were from the newly launched 512-unit Lumina Grand.

No. of Private Housing Units Sold in Primary Market (excluding Exec Condo)
No. of Private Housing Units Sold in Primary Market (excluding Exec Condo)

Source: Research, URA


Take-up rate dropping


Usually when property developers launch more housing units, their sales will increase in that month. Therefore, a more representative measure of housing demand is the take-up rate of the units launched in that month.


The sales take-up rate is the ratio of the number of units sold to the number of units launched in a given month. In January 2024, it stood at 67.4% for private housing units.


The monthly take-up rates of more than 200% should be disregarded as the high rates are due to the exceptionally low number of units launched in that month. Hence, it does not necessarily represent strong housing demand.


In 2022, the primary market monthly take-up rate for private housing units has been more than 100% for 11 out of the 12 months. However, the monthly take-up rate in 2023 has varied between 60% and 81% in the months when more than 100 units were launched.


This indicates two things.


First, the homebuying demand for new housing units are weakening in 2023 and in the first month of 2024.


Secondly, the lower take-up rate means that it will take longer to sell all the units in a residential development, especially those that are of significant size, such as those with more than 400 units each.


Table 1: Residential primary market take-up rates and number of housing units launched


Take-up rate of private housing & EC units

Take-up rate of private housing units

No. of private + EC units launched

No. of private housing units launched




































Source: Research, URA


The combined effects of the two recent rounds of property market curbs that were introduced in September 2022 and April 2023 contributes to the weaker housing demand. The doubling of the Additional Buyer’s Stamp Duty (ABSD) for foreign buyers that were implemented in April 2023 had drastically reduced the demand for local residential properties from foreigners.


The accordion effect


Property developers are waiting for the most opportune time to launch their residential projects and would hold back their launches when market sentiments are deemed to be poor.


With about 30 residential projects slated to launch this year, we could see an “accordion effect”, where there will be some months when there could be three to five projects launching at the same time, and there will be some months when there would be a drought of new project launch.


This would lead to temporary indigestion in the property market in the months when there are a few big residential project launches.


Number of unsold units rising


Based on the real estate statistics released by the URA today, the number of unsold units has risen from 6,246 units in December 2023 to 7,936 private housing units (excluding EC) last month. Property developers sold 6,421 private housing units in 2023. The stock of unsold units is more than enough to meet the housing demand for this year.


This could be worrisome as homebuying demand this year could be moderately weak due to the slow economic growth and uncertainties in the employment market. The macro-economic factors would create headwinds for property sellers and developers.


One of the best things that developers could hope for is that the government would dial back some parts of the cooling measures that would boost housing demand. However, in the absence of an economic recession or a severe downturn in the property market, the government is unlikely to reduce the property market curbs.


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