During the Hungry Ghost Festival, or ‘Ghost Month’, we know not to commit booboos like stepping on or over food offerings. Also, depending on how much of a scaredy-cat you are, you might make sure to return home before sunset too. But have you heard of people observing property superstitions during the seventh lunar month?
More ‘pantang’ folks tend to avoid making property deals during this ‘inauspicious’ period. With much of the Singaporean population being ethnically Chinese, this usually has a significant effect on the property market.
However, the trend that Singapore property does not move during the Hungry Ghost Festival is not always true. Buyers seemed to have bucked this trend in 2020 and 2021.
While 2022 seemingly saw adherence to the superstition return, it made us wonder what about 2023? Did Singaporeans cast aside tradition and superstition to buy property during the Hungry Ghost Festival this year? Let’s find out.
Hungry Ghost Festival and Property Taboos in Singapore
Before we look at the data surrounding property buying, let’s talk about the property taboos surrounding the Ghost Month period.
When the gates of Heaven and Hell spring open, spirits are given a pass to roam the realm of the living. Offerings of food and incense are made to appease these ghosts and to prevent them from causing mischief.
Chinese people believe that if you embark on a major life change during the seventh month, you’re bringing bad luck to yourself and your home. You would want to pay attention to these actions:
- Buyers to keep away from viewing houses at night as empty apartments have ‘yin’ energy which attracts spirits
- Sellers avoid opening their homes for viewings, especially come nightfall; same reason as above
- Ring the doorbell or knock before you enter an empty apartment
- Steer clear of renovating as noise from renovation works may disturb and anger the dead
- Put off moving into a new house as it’s an invitation for spirits to move into your home
Property Transactions During Hungry Ghost Festival
Now we understand the why behind these no-nos, let’s take a look at transaction volume trends from 2018 to 2022.
Ghost Month (Zhong Yuan Jie) Dates
In the years 2018 to 2022, we’ll be looking at data in July through September as Ghost Month fell on these dates:
- 11 August to 9 September 2018
- 1 August to 29 August 2019
- 19 August to 16 September 2020
- 8 August to 6 September 2021
- 29 July to 26 August 2022
- 16 August to 14 September 2023
Private Property Transactions during Hungry Ghost Festival 2018 to 2023
We headed over to URA to get data on both new and resale figures for landed and non-landed transactions (including executive condominiums or ECs).* And this is what we noticed.
*Data is accurate as of 9 October 2023.
Powered by DataSense. Source: URA
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HDB Resale Transactions During Hungry Ghost Festival 2018 to 2023
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Based on the above, here are our key findings:
2018 and 2019: Q3 Transaction Volumes Were Affected by Hungry Ghost Festival and Cooling Measures
2018 stayed true to the trend, and we saw a big dip from July to August. We know new private home sales dropped 64% in August 2018. We also know this sharp decline was aided by a round of cooling measures introduced in July of that year. The Additional Buyer’s Stamp Duty (ABSD) has since remained unchanged.
Over at the HDB resale market, the number of transactions also tanked, with a modest recovery from August to September 2018. The tighter Loan-to-Value (LTV) limits probably limited the amount buyers could borrow from banks, thus affecting property sales.
Again in 2019, we saw a dip in the HDB resale and private property market transactions, though not quite as dramatic as the previous year. Effects of the property curbs lingered as HDB upgraders were yet again more cautious. The number of condo purchases dipped during this period.
2020: Motivated by Need for More Living Space, Buyers Bucked the Hungry Ghost Festival Trend
But in 2020, we observed a month-on-month growth from July through September in both markets. Property prices and demand rose despite Singapore going through its worst recession since 1965 and the mass exodus of foreign talent.
Think back to when we were only half a year into dealing with the pandemic. We were new to dealing with home-based learning and work-from-home arrangements. It was then we realised how little space we had at home. Once it became clear COVID-19 wasn’t going anywhere, we collectively turned towards buying larger properties to meet our changing needs.
At the same time, BTO construction delays pushed young couples into the resale HDB market. In turn, prices began to pick up. Singaporeans, being ever-practical, saw that demand and prices were climbing at a quick pace. So what do they do? Buy when they score a good deal, superstition be damned.
Andrew Nair, Associate Division Director for ERA Realty Network confirmed this. Typically, the ‘best’ time to buy a property is during Chinese New Year and the seventh month as only the most sincere or desperate sellers will allow viewings, improving your chances of scoring a good deal.
“However, we see that the resale supply is very low at this point. Sellers have sold their units and cannot find replacement homes. Buyers’ viewings now are mainly very sincere and/or desperate. Most of our transactions during this time are expedited.”
He adds that there is “a lot of fear” among buyers, who feel prices from homes will only increase if they wait. The result? An increasing number of HDB flats sold with high cash over valuation (COV) and more buyers who are willing to purchase a home after only having done virtual viewings.
In a way, the power used to lie with buyers but now, the script has flipped.
2021: Sales Volume Dipped in Q3 2021, But It’s Because We’re Coming Down from a High
After what feels like a very, very, very long and difficult time, we finally made it to 2021. For private property, the transaction volume decreased month-on-month from July through September.
While the graph does follow the Hungry Ghost Festival trend, there is another explanation for this dip.
July was an exceptionally good month for sales, the second-best in 2021 so far. In the private property market, some developers wanted to close more deals prior to the seventh lunar month and buyers may have been afraid to be ‘priced out’.
We already knew it was impossible to sustain such a high volume of transactions. That’s why it makes sense that transactions dipped in August and September. But if you compare the monthly figures year-on-year (YoY), from 2018 through 2021, there is still annual growth observed.
Over at the public housing side of things, HDB resale prices rose for the 13th straight month in July 2021. It continued climbing in August 2021, before dipping slightly in September. These figures still buck the Hungry Ghost Festival trend and show no signs of abating.
That’s to be expected since the unhappiness with BTO construction delays reached a high point in late August 2021 and a contractor even went bust. Young couples and families with urgent housing needs have since been given the option to cancel their BTO flat at no cost.
2022: Sales Volume Continues to Drop YoY, But Prices At a Record-High
In 2022, sales volume in private property and HDB resale markets dipped YoY. As compared to the private property market, the HDB resale market recorded a smaller YoY dip.
Again, it is difficult to keep up with the high transaction volumes observed in 2020 and 2021. With all that’s happening in the market (i.e. cooling measures, lack of new launches, rising interest rates, and pandemic-induced construction delays), it’s not a surprise that transaction volumes have dipped overall. The number of transactions in the private property market has slid back to pre-pandemic levels in 2019.
But what’s concerning is the record-high prices observed. Currently, HDB resale prices are at a 27-month high in September 2022 and according to URA Q3 2022 flash estimates, private property prices are set to increase for the 10th straight quarter. The lack of supply in both private and public property markets has kept demand strong and prices buoyant.
Still, signs of a slowdown have been observed in the HDB resale market as sales volumes gradually wane and prices climb more slowly than in 2021. The latest September 2022 property cooling measures are also expected to reign in the red-hot private property market.
What’s interesting is both markets saw transaction volumes dip from July to August, before registering a slight increase in September, mimicking the pre-COVID-19 pandemic 2018 and 2019 graphs where transaction volumes dipped during the Hungry Ghost Festival period. Aside from buyers and sellers adhering to Hungry Ghost Festival superstitions, Dr Tan Tee Khoon, Country Manager, PropertyGuru Singapore, suppose this trend could be a result of several factors.
"Celebratory periods created long weekends in July (Hari Raya Haji) and August (National Day). Would-be buyers may have gone on holiday, resulting in a lower number of property viewings and consequently, property transactions. While families with school-going children may have also taken the opportunity to travel during the school holidays in September, the major new condo launches of Sky Eden @ Bedok and Lentor Modern likely pushed up numbers. During this period, rumours of new property cooling measures being introduced were circulating, which may also have boosted sales."
2023: Transaction Volumes Continued Moderating as Prices Peaked Further
In Q3 2023, the number of condos sold decreased by 15% QoQ and 26% YoY. Between July and August 2023, there was also a 29% MoM dip in transaction volumes (from 2,699 to 1,926 units sold). This lines up with the leadup to the Hungry Ghost Festival period, which started on 30 August 2023.
But can this decreasing transaction volume be chalked up to superstitious behaviour? Or were there larger forces at play?
One possible reason why Q3 2023 saw a consistent month-on-month dip in transaction volumes could be because of the other attractive major new condo launches in the first half of the year. First-time homebuyers and HDB upgraders may have already bought their preferred properties, reducing the number of buyers on the lookout for a condo.
A second reason could be that the effects of the April 2023 property cooling measures might have finally settled in. The adjusted Additional Buyer’s Stamp Duty (ABSD) rates increased the cost of acquiring private property, especially for foreign buyers. Consequently, investors and these foreign buyers may have retreated from the market.
The current high mortgage interest rate environment also could have hampered property buying decisions due to the high costs of financing a property. Our PropertyGuru Singapore Consumer Sentiment Study H2 2023 reported that 59% of first-time homebuyers will delay buying a home if home loan interest rates continue to rise. ‘Pantang’ or just private homes being too expensive? You decide.
Year-on-year, the number of HDB resale flats transacted during Q3 2023 was fewer, as compared to the same time period in 2022 and 2021 respectively. The increased number of BTO flats launched and the dwindling supply of HDB resale flats likely pulled first-time homebuyers’ attention away from the HDB resale market.
More interestingly, what persisted was price growth: Q3 2023 was the fourteenth consecutive quarter of HDB resale price growth. Prices were bolstered by the transactions of bigger HDB resale flat types (3-room, 4-room, and 5-room) and the consistently high number of million-dollar HDB flat transactions.
Notably, we did see a peak in the month of August. The month also recorded the highest number of million-dollar flat transactions in 2023, so far. Some property analysts say more buyers may have decided to bite the bullet on their chosen HDB homes before Ghost Month, which started on 30 August 2023.
New Condo Launches During Hungry Ghost Festival: 2018 to 2023
We’ve discussed the buyers’ property-buying behaviour during the Hungry Ghost Festival period. What about the developers?
2018 to 2019: Before the Pandemic, Developers Avoided Launching Condos During Hungry Ghost Festival
Generally, developers adhere to these Chinese superstitions and put off launching new projects before the seventh lunar month. In 2018, developers didn’t release many new launches in August. There were only 534 new units (including ECs) available, compared to July’s 2,239 units.
It was the same tale in 2019. August 2019 saw developers selling 1,122 units, of which 70% were from previous launches. Parc Clematis was only launched two days after the ‘unlucky’ month that year.
Normally, adopting a ‘better safe than sorry’ attitude when it comes to superstition is a safe move to boost the chances of having great weekend launch sales. But you forget, we are navigating unprecedented times.
2020 to 2021: Developers Launched Condos During Hungry Ghost Festival, Bucking Trend
The restrictions put in place during the pandemic made it much more difficult for potential buyers to turn up at show flats. Developers, buyers, and sellers had to adapt, leading to the rise of virtual viewings. Someone even bought a $2 million house without physically heading down!
Perhaps fearful of more COVID-19 curbs on the number of persons allowed in show flats, developers launched when measures seemed to ease. Of the 3,791 units launched in Q3 2020, August saw 1,582 new condo units put on sale. Then, this figure was the highest number of units launched in a month so far.
Of the top eight most popular condos for the year, NoMa was launched on 29 August, right smack in the middle of the Hungry Ghost Festival. Other projects that made the list were Forett at Bukit Timah (launched 8 August 2020), Verdale (launched 19 September 2020), and Penrose (launched 26 September 2020), all launched slightly before or after the seventh lunar month.
In 2021, there weren’t many launches in Q3 2021. Still, it seems developers don’t mind launching during the Hungry Ghost Festival as much. The Watergardens at Canberra achieved 60% sales on its launch weekend (28 to 29 August). That same weekend, Klimt Cairnhill was launched too. The first weekend after the seventh month, Parc Greenwich sold 65% of units on its launch weekend.
2022: Are Developers Adhering to Superstition Again?
Just one week before the Hungry Ghost Festival period, AMO Residence launched on 23 July 2022 and sold 98% of its 372 units. The Lentor Modern launch on 17 September was similarly well-received, with a take-up rate of 84%. Another major Q3 2022 launch, Sky Eden @ Bedok, sold 75% of its units at launch on 7 September 2022.
Lentor Modern, AMO Residence, and Sky Eden @ Bedok went on to be the top three best-selling non-landed private residential projects for Q3 2022, moving 514, 362, and 121 units, respectively.
Interestingly, these major launches just avoided the Hungry Ghost Festival period. A coincidence or a sign developers are reverting to their superstitious ways as we transition back into life before the pandemic? You decide.
2023: No Developers Launched Condos During Ghost Month
Between July and August 2023, there were eight developer launches (excluding Altura, an executive condo). The top-performing condos of Q3 2023 were Grand Dunman (launched 15 July 2023), Lentor Hills Residences (launched 8 July 2023), and The Myst (launched 5 July 2023). They sold 577 units, 390, and 151 units, respectively (as of 29 September 2023).
The Arden, Orchard Sophia, and TMW Maxwell, were the latest condos to launch before Ghost Month (all on 12 August 2023). During their launch weekends, the condos sold 2.2%, 26%, and 24.4% of their units, respectively. Did the difference in condo performances between launches in July 2023 and August 2023 developer launches affect their sales performances?
Dr Lee Nai Jia, Head of Real Estate Intelligence, Data and Software Solutions, PropertyGuru Group comments, "Given the importance of the first-weekend launch to developers under the current conditions, developers may find it prudent to schedule around Ghost Month to minimise downside risks.
With fewer launches, sales will also correspondingly be lower. However, it’s worth noting that the superstitions associated with Ghost Month may hold less sway over Gen Y and Gen Z buyers, who now make up a significant portion of the market. Over time, the effect is likely to be less significant."
Moving Forward, What Can We Expect from the Private Property and Resale HDB Market?
The latest Q3 2023 URA and HDB flash estimates suggest that prices are expected to continue rising, albeit more slowly. We expect the trend of uneven performance among major new condo launches to continue in Q4 2023.
As for HDB resale flats, there will be fewer homes fulfilling their Minimum Occupation Period (MOP) in 2023 compared to 2022 – about 16,000 in 2023 compared to about 31,000 in 2022.
This means that demand for HDB resale flats may persist among first-time homebuyers who want to stay in specific neighbourhoods and HDB upgraders who want more space.
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