The Zhitong Finance App learned that as housing purchase restrictions introduced by the Singapore government and weak economic conditions began to put pressure on the market, sales of new private homes in Singapore in 2023 fell to their lowest level in 15 years. Demand is cooling across the board, with developers selling only 6,671 new housing units last year, according to the latest data released by the Urban Renewal Authority of Singapore on Monday. The monthly sales volume in December of last year dropped sharply to 135 units, less than one-fifth of the sales data from a month ago.

Annual housing sales in Singapore fall — in 2023, the number of homes sold by developers fell to the lowest level in 15 years

This year's data is down nearly 10% from the previous year, the lowest level since 2008, further showing clear signs that market demand is cooling down. So far, Singapore, which can be called the “leading player in the global property market,” has avoided the worst phase of sluggish demand during the global real estate market recession, but the industry is increasingly being dragged down by restrictions on real estate purchases and the global economic slowdown.

In April of last year, the Singapore government doubled the house purchase tax on foreigners to 60%, which hurt external demand. Wall Street bank Citigroup Inc. (Citigroup Inc.) anticipates that developers' profit margins on residential projects will decline further this year, partly due to the large upfront costs of about 44 projects. Huttons Group (Huttons Group), a world-renowned real estate brokerage firm, predicts that as the economic situation weakens, market demand for new homes will be further tested in January, and at least six new housing units may be listed this month.

The slowdown in sales also dragged down developers' stock prices. The stock price of City Developments Ltd., the largest listed real estate company in Singapore, fell 19% last year, exceeding the annual decline of Singapore's benchmark stock index.

Ken Foong, an analyst at Bloomberg Intelligence, said: “The high prices of new housing products combined with the high global interest rate environment are probably the main reasons for the decline in new home sales.” “Meanwhile, developers in Singapore may need to lower sales prices in the future to attract market demand.”

The Urban Renewal Authority of Singapore said earlier this month that the overall volume of transactions in the private housing market last year (including the volume of second-hand housing resale transactions) reached its lowest level since 2016.

Tricia Song, head of research in Singapore and Southeast Asia at CBRE (CBRE), said that against the backdrop of “countless new listing options, fatigue from buyers, growing resistance to high prices,” and the weakening overall economic conditions in the Asian region, the market's investment sentiment has become more selective.

The optimistic side is that the economic slowdown in Singapore has yet to have a significant impact on housing prices, and local and international demand is driving up the value of regional private housing complexes, which often lack such products. According to preliminary official estimates, housing prices in Singapore bucked the trend and rose 6.7% last year.

This means that if prices continue to run ahead of economic fundamentals, the government is still likely to implement new purchasing restrictions to ensure a “stable and sustainable” market, Bloomberg Intelligence analyst Ken Foong said.

In contrast, Tricia Song from CBRE said that the decline in sales of new homes in Singapore indicates an overall lower risk of overheating demand and may indicate more loosening measures to support demand.

Wall Street analysts can be described as being hugely divided on housing price trends in Singapore. Morgan Stanley expects housing prices in Singapore to drop 3% this year, while Citigroup expects housing prices to increase by 4% to 5%. Bloomberg Intelligence believes that prices will move sideways, and there is some downside risk.