Figures are based off the official flash estimates for URA quarterly statistics, released on 1 Oct 2024.
Weaker buyer sentiment has led to lower transaction volumes, contributing to a decline in private home price growth
Amidst a slowdown in overall transactions in 3Q 2024, the All-Residential Property Price Index (PPI) showed a slight decline. This correction is largely attributable to fewer new launches, which have traditionally fuelled price growths.
Various headwinds continued to exude pressure on the private property market. A wave of local layoffs in the banking and tech sectors weighed on buyer sentiments in the earlier months. Likewise, prior to the Federal Reserve Board (Fed’s) rate cut announcement in September, buyers were also more likely to be cautious due to elevated interest rates affecting affordability.
This combination of retrenchment fears and tighter borrowing criteria led to some prospective buyers adopting more cautious stances, and ultimately, softer private home transaction volumes in 3Q 2024.
Revised GDP Forecast and Rate Cuts Offer Hope, But Rising Retrenchments Weigh on Buyer Confidence
According to the Monetary Authority of Singapore (MAS), private sector economists have revised their gross domestic product (GDP) growth forecast for 2024 from 2.4% to 2.6%. Paired with the Fed’s latest rate cut and other positive economic indicators, such as low unemployment rate, could renew homebuyers’ sentiment.
But more concerningly, the number of retrenchments has been steadily increasing since Q4 2022, with retrenched citizens taking longer to return to work. These factors combined could lead to more cautious buyer sentiment, with buyers turning conservative.
Private Residential Home Prices
Figures from URA’s flash estimates indicate that the All-Residential PPI decreased by 1.1% quarter-on-quarter (q-o-q). This is a reversal of the previous quarter, which saw prices growing modestly by 0.9% q-o-q.
Chart 1: All-Residential Property Price Index versus Transaction Volume
In the non-landed private home segment, prices shrank by 0.3% q-o-q in 3Q 2024. This is a reversal of the last quarter’s performance, which posted a 0.6% q-o-q gain in non-landed private home prices.
Spearheading these shifts, only the Rest of Central Region (RCR) posted an increase in non-landed private home prices among regional sub-markets, registering a flattish 0.2% q-o-q uptick in 3Q 2024. In contrast, the Outside Central Region (OCR) and Core Central Region (CCR) both saw prices falling by 0.1% and 1.5% q-o-q respectively.
In the landed property sub-market, prices shrank by 3.8% q-o-q in 3Q 2024, reversing the 1.9% q-o-q growth rate registered for 2Q 2024.
Transaction Volume
Transaction numbers for all private properties exhibited a slowdown in 3Q 2024. Based on flash estimates, a total of 4,372 units were sold in 3Q 2024. This reflects a q-o-q decline of 11.0%, from the 4,915 units sold in 2Q 2024. Compared to last year, transaction volume has also decreased by 15.9% y-o-y, down from 5,201 units in 3Q 2023.
New Sale Transactions (Non-Landed Private Homes)
3Q 2024 saw a total of three project launches, with Kassia and Sora launched in July and 8@BT launched in September. With the Hungry Ghost Festival falling in August this year, developers exhibited customary reluctance in launching new projects, resulting in fewer launches for 3Q 2024.
Caveat data from URA Realis as of 30 Sept shows that developers sold 1,033 new non-landed private homes (excluding ECs) in 3Q 2024, marking a 42.5% q-o-q increase from the 725 units transacted in 2Q 2024. These figures place the total number of new non-landed private homes (excluding ECs) sold 3Q 2024 at approximately 2,922 units.
Table 1: Best-selling new launches in 3Q 2024
Some 71.7% of new home transactions in 3Q 2024 fell below $2.5mil, a sweet spot pricing for most buyers. A substantial 26.3% of new home transactions were priced below $1.5 million, primarily driven by smaller units at Kassia and Sora.
Additionally, based on caveat data, fewer HDB upgraders purchased new condos in 3Q 2024 compared to the previous quarter. In 3Q 2024, purchasers with HDB addresses made up only 15.4% of all new condo buyers, a drop from 27.1% in 2Q 2024. It is also worthy to note that a significant number of buyers that have not provided their address in 3Q 2024.
The wider price gap between new and resale private homes, driven primarily by rising prices of the former, has priced HDB upgraders priced out of the new home market.
Resale and Sub-Sale Transactions (Non-Landed Private Homes, Excluding EC)
Sales of non-landed private homes (excluding ECs) continue to be largely driven by resale transactions. Based on caveats, secondary market transactions accounted for 68% of all non-landed private residential sales in 3Q 2024, closely aligning with the 75.5% share in 2Q 2024.
This is despite the 18.9% q-o-q drop in the number of non-landed private homes (excluding ECs) sold on the secondary market, from 3,295 units in 2Q 2024 to 2,672 units in 3Q 2024.
Buyer demand in the secondary market also stayed robust as the price gap between new launches and resale non-landed private homes remains significant. Based on caveat data, the gap between average psf prices for new and resale non-landed private homes was 52% in 3Q 2023; this has since shrunk to 39.2% in 3Q 2024.
Sub-sales of non-landed private homes similarly dropped by 39.2% q-o-q, from 370 units in 2Q 2024 to 225 units in 3Q 2024. However, this decline can be seen as a consequence of recently completed, mid-to-large sized projects like Dairy Farm Residences (460 units) and Affinity at Serangoon (1,052 units) being fully sold out, rather than a lack of buyer interest.
Core Central Region
Amongst the three regional sub-markets, the CCR showed the sharpest decline in price, falling 1.5% q-o-q for non-landed private properties (excluding ECs). This continues the trend from 2Q 2024, which saw prime district prices falling 0.3% q-o-q.
Caveat data also showed that transaction volumes for non-landed private properties in the CCR also fell 27.3% q-o-q in 3Q 2024, reversing the 16.6% q-o-q increase seen in 2Q 2024.
Apart from the ongoing pressure from the Additional Buyer’s Stamp Duty (ABSD) hike on foreign buyers, the q-o-q decline in CCR transactions in 3Q 2024 can also be traced to the higher base in the previous quarter, lifted by price adjustments on projects like Sentosa and Cuscaden Reserve.
Closer scrutiny of caveat data also reveals a steep decline in the number of CCR luxury non-landed private homes sold in the primary market. Transactions for such properties in the $5M and above range fell 44% q-o-q, with sales falling from 25 units in 2Q 2024 to just 14 units in 3Q 2024.
Rest of Central Region
Registering the biggest growth in prices, URA’s flash estimates showed that non-landed private properties in the RCR appreciated 0.2% q-o-q in 3Q 2024, more flattish than 2Q 2024’s growth rate of 1.6% q-o-q.
Based on URA caveats as of 30 Sept, transactions for non-landed private properties in the RCR shrank slightly by 10.4% q-o-q in 3Q 2024, reversing the increase observed in 2Q 2024. A likely reason for this shift is the rising cost of non-landed private property in the RCR, as indicated by its price index growing from 213.0 in 3Q 2023 to 215.7 in 3Q 2024.
As a result, HDB upgraders residing in the RCR, who have typically looked within the region for opportunities, may be more likely to turn their eye towards secondary stock; these include resale HDB flats in the suburbs or condos in the OCR
Outside Central Region
In the OCR, prices of non-landed private properties shrank 0.1% q-o-q; this reverses the trend from 2Q 2024, which saw prices growing a flattish 0.2% q-o-q. In contrast, prices of non-landed private homes in the OCR grew y-o-y, demonstrated by corresponding price indices rising from 237.4 in 3Q 2023 to 248.9 in 3Q 2024 (flash).
In contrast, according to caveat data, transactions for non-landed private homes in the OCR fell by 3.97% q-o-q and 4.23% y-o-y in 3Q 2024.
As detailed above, escalating private property prices in the OCR might have contributed to this shift. Given the rise in costs, price-sensitive homebuyers are likely more inclined to opt for resale HDB flats in prime locations or newer HDB units, instead of an OCR private condo.
Outlook
In the coming months, we anticipate a rise in new home transaction volumes, due to the line-up of upcoming launches that could contribute to some 5,200 units in 4Q 2024.
Some notable launches in 4Q 2024 include Meyer Blue at Meyer Road, Norwood Grand at Champions Way, and Chuan Park in Lorong Chuan, and Emerald at Katong. Novo Place (EC).
Table 2: Potential new launches in 4Q 2024
We expect to see greater buyer receptiveness with sanguine economic sentiment and the first round of Fed interest rate cuts materialising in September. In any event, any additional Fed rate cuts, in the future, could bolster market sentiment down the line, while also paving the way for more housing market activity, though not in large droves, in 2025.
Among the regions, we expect the CCR to continue seeing muted activity, while RCR and OCR demand are likely to rise with the influx of year-end new launches supported by HDB upgraders and private owner looking to right-size.
Table 3: Market forecast for non-landed private residential properties
| New Sale | Resale/Sub-sale | |
| Price | Increase between 3% to 5% | |
| Volume | 5,500 to 6,500 units | 12,000 to 13,000 units |
ERA projects the total resale transaction volume to reach between 12,000 and 13,000 units, with price to rise by 3% to 5% y-o-y in 2024. For new sale transactions, factoring current market conditions, ERA has revised our forecast to between 5,500 to 6,500 units by end-2024, a revision from the previous 7,000 to 8,000 units.
Disclaimer
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