People look at the Iwagumi Air Scape light art installation by Australian studio ENESS during the i Light Festival at the Marina Bay in Singapore June 13, 2024. (Photo: Reuters)

SINGAPORE - New-home sales in Singapore fell for a second month, as weak demand and a lack of major launches continued to weigh on the market.

Just 221 units were sold by developers in May, down from 301 in April, according to data released Tuesday by the Urban Redevelopment Authority (URA). From a year earlier, transactions slid 79%. Sales in the first half are on pace for the lowest in more than a decade.

High interest rates and government cooling measures have slowed Singapore's once-booming residential market. The city-state is also set to see an influx of new supply in coming quarters, amid a drive by policymakers to tackle concerns about housing affordability. 

It is unlikely there will be a significant increase in new-home sales in June, when families typically travel due to a monthlong school holiday, said Christine Sun, chief researcher and strategist at real estate agency OrangeTee Group. 

Realtor Knight Frank said it now expects fewer than 7,000 new-home sales this year, down from as much as 9,000 it earlier forecast, unless interest rates are cut or government measures are eased.

Still, prices have remained elevated despite the drop in transactions. Private home values have risen for three straight quarters, and some eye-popping transactions are still taking place. In May, an apartment at Skywaters Residences, a luxury development backed by Alibaba Group Holding Ltd, was bought by a foreigner of unknown nationality for S$47.3 million (US$35 million).

Meanwhile, developers are holding back on launching projects. Just 248 new private homes were released for sale last month, down from almost 1,600 a year earlier, according to the URA.