The Hungry Ghost Festival is a topic that gets most people spooked up. Fortunately today, we’re here to talk about property sales!
Known as Zhong Yuan Jie in Chinese, the Hungry Ghost Festival falls on the fifteenth day of the Hungry Ghost month (also known as the seventh month), which is considered to be the most inauspicious month in Singapore.
During this time, many superstitious folks will steer away from property deals. Not only that, but developers also generally avoid launching new projects before the Hungry Ghost Festival.
As such, the most common knee-jerk reaction is to immediately think of slower property sales in the months of August and September, which fall in between the Hungry Ghost month.
But is this actually true?
In this article, we’ll take a look at the monthly sale figures of past years and see if the data paints a similar story.
Why are people generally superstitious about moving/buying a house during the Hungry Ghost month?
During the Hungry Ghost month (which falls on the seventh month of the Chinese Lunar Calendar), it is said that the gates of Heaven and Hell will open, and spirits of the dead are free to roam around the realm of the living.
To avoid the malice and wrath of vengeful ghosts (and bad luck), many would hold prayers, burn incense, pay homage to their ancestors and offer food throughout the month-long festival. Traditionally, many also avoid staying out too late at night, going for holidays, getting married, and of course, buying and/or renovating a new home.
“Superstitious buyers and sellers would avoid viewing houses or bringing buyers to view their homes, especially at night,” says Darren Ong, a property agent for OrangeTee and Tie.
“Having said that, viewing appointments still happen during the Hungry Ghost month, so it’s a sign that not everyone believes in superstition”. In fact, he has observed that the superstition exists across all age groups, though he has encountered more young and “pantang” buyers of late.
But what does the data show: Are Singaporeans really superstitious about making property-related decisions viewing homes during the Hungry Ghost month?
Let’s examine private property transaction data from 2014 to 2020
Despite how people might feel about the Hungry Ghost month, the numbers tell the most honest tale.
According to URA sales data gathered over the last six years (2014 to 2020), private property sales during the Hungry Ghost month are actually pretty good, particularly for August. Just take a look at the graph below (note this includes both new and resale figures, for landed and non-landed transactions):
Now, what about HDB resale transactions over the same period? Let’s take a look:
Now, let’s look at HDB resale transactions from Jan 2014 to Aug 2020:
As you can see, the data above shows a similar trend – HDB sales during the months of August and September have also been good.
So, what do the figures tell us?
Even though the Hungry Ghost month is often perceived to be a bad month for property deals, the numbers above tell us a completely different narrative.
Whether it’s private properties or resale HDB flats, it seems that properties deals are largely unaffected by superstition. In fact, as the figures above show, August is actually one of the best-performing months of the year.
Even this year, when the COVID-19 crisis has affected the economy and thousands of jobs, new homes sales in August have continued to be strong (there were 1,256 new home sales recorded in August, the highest August sales in the last eight years, and the highest since September 2019).
While most might attribute this to pent-up demand during the circuit breaker period, the figures above still show that August and September have always seen strong sales.
Christine Sun, Head of Research and Consultancy at OrangeTee said that the uncertainty might be the reason for this.
“Rising economic uncertainties and volatile equity markets seemed to be fuelling the boom for properties as more buyers seek shelter for safe-haven assets. Investors have the tendency to move away from cash holdings and riskier investments towards property assets for wealth preservation. Moreover, record-low interest rates are stoking the property market’s recovery as mortgages are now increasingly affordable for both owner-occupiers and property investors,” she said.
On a month-on-month (m-o-m) and year-on-year (y-o-y) basis, August’s new private home sales was 16.3% and 11.8% higher.
Meanwhile, Leonard Tay, Head of Research at Knight Frank Singapore, observed that the Hungry Ghost month “did nothing to halt the gaining momentum from “needs-based” purchasers who sold their properties and are now in need of a new home and those getting married”, believing that “buyers whose jobs are not at risk and have “substantial savings could have also purchased a new home for fear of missing out.”
“HDB homeowners who have recently completed their five-year Minimum Occupation Period (MOP) in BTO Flats, could have sold their units and used the gains to upgrade to new condominiums,” he added.
Could there be other reasons which would have likely affected property sales during the Hungry Ghost month?
Sales during the Hungry Ghost month aren’t always good; but this could be affected other key happenings. For example, the 2018 cooling measures which kicked in July caused a 50.6% slump in new property sales in August that year. Buyers and investors were understandably still trying to grasp the new Additional Buyers Stamp Duty (ABSD) and tighter loan-to-value (LTV) limits which affected property sales.
Also, as mentioned earlier, as part of the “Hungry Ghost effect”, developers generally avoid launching projects in August, which could also correlate to sales performance in that month. For instance, in August last year, developers sold 1,122 units, but 70% of those were from previous launches. Sales were augmented by Parc Clematis, which launched two days after the Hungry Ghost Festival.
The bottom line: While superstition does exists, people will still buy and sell if there are good deals
So, while the Hungry Ghost Festival is still a large part of Singapore’s culture, it seems that people aren’t too worried about buying/selling a home during the Hungry Ghost period, in fact, some would seize the moment and look for good property deals.
“Perhaps people were more superstitious in the past, but in recent times, we see that a lot of Singaporeans are braving this superstition for good deals,” says Andrew Nair, Associate Division Director at ERA Realtor.
According to him, the best time to buy a property is during the Chinese New Year period and Hungry Ghost month.
“If the deal is good, even older folks which are normally more ‘pantang’ will find a way or a reason, to view the unit and grab the opportunity to buy.”
Find homes in Singapore, or let us help you with your mortgage