August developer sales slump: Is it buyer fatigue or the ghost month effect?

In August, new home sales dropped by 72% YoY.

The new homes market was muted in August, and it's likely because of "buyer fatigue amidst a flurry of launches."

"Buyers could also be experiencing some fatigue following a spate of new launches in the last few months, which presented them with a wider variety of choices that require more time to evaluate before entering into a purchase,"  Wong Siew Ying, head of Research & Content at PropNex Realty.

Leonard Tay, head of research at Knight Frank Singapore, said since homebuyers have more projects to select from, they have become "increasingly reticent."

"[Homebuyers are] taking the time to evaluate the selection of projects that have been launched in the past few months, as well as upcoming launches," Tay said.

Other experts meanwhile said August being the start of the lunar seventh month also played a role in the quiter market.

"Some buyers stayed on the sidelines as the lunar seventh month started in mid-August, deemed an inauspicious period for purchasing big-ticket items," Christine Sun, senior vice president of Research and Analytics at OrangeTee, said.

Wong echoed the sentiment, saying: "The stellar sales in July was always going to be a tough act to follow in August, which coincided with the start of the Hungry Ghost month – a period where market activity tends to slow due to fewer launches."

Data from Huttons showed that project launches only took place in 1H of August with no launches in 2H.

"This led to 590 units launched in August, 72.6% lower than July 2023 but 340.3% higher than a year ago. There was no launch during the lunar seventh month in 2022 which spanned almost the entire month of August," Huttons' Lee Sze Teck said.

Tricia Song, CBRE's head of Research for Singapore and Southeast Asia, meanwhile, pointed to "souring macro backdrop, elevated interest rate hikes and cooling measures" as factors for the slowing demand for new homes. 

Tay echoed this, saying: "Investors, both locals and foreigners, will likely remain on the sidelines until interest rates peak and stabilise, and until such time when more optimism returns to the economy."