Singapore Private Home Prices Inch Down Amid Fewer New Launches in 3Q 2024

SINGAPORE, 25 October 2024 – Private home price growth inched down in 3Q 2024, largely due to a slowdown in new home price growth, which had previously been a key driver of prices in the private home segment

“We have also seen improved buyer sentiment and more homes sold this quarter despite it being a typical seasonal lull. This is likely due to sound economic conditions and recent Fed interest rate cuts, which have offered some relief to homebuyers even as mortgage rates remain elevated.”

“Buyers are still finding value in resale properties, as demand in the secondary market stayed robust. We continued to see a significant price gap of 31.6% between new launches and resale non-landed private homes this quarter.”

“As such, ERA has revised our forecast for secondary transactions to reach between 14,000 and 15,000 units for the whole of 2024.”

Table 1: Median Non-landed Residential Home Prices

Source: URA, ERA Research and Market Intelligence

Table 2: Non-landed Units Sold by Price Quantum

Source: URA, ERA Research and Market Intelligence

“Homebuyers remained sensitive to the overall price quantum. This quarter, a notable 83% of non-landed secondary transactions fell below the $2.5mil price quantum, and 70% of the new home transactions were also within this price range.”

“As we approach the last quarter of the year, we expect to see a strong take-up in new home sales as the bulk of 2024 launches are set to take place then. These include the upcoming launches such Chuan Park, which is the first launch in Lorong Chuan since 2012, and Emerald at Katong in the popular D15 which we think will see good demand. Separately, we have already witnessed strong take up rates at Oct launches such as Meyer Blue and Norwood Grand which sold just above 50% and 84% at their launch weekends respectively.”

“In the run-up to end-2024, the final quarter is expected to see the launch of 8 new private home developments and one executive condo (EC) project. This will yield some 3,500 private homes and 504 EC units, or 4,004 new homes in total.”

The anticipated units slated to launch in 4Q 2024 is expected to overtake the first nine months of 2024. With that we should see a strong take-up in new home sale with the bulk of 2024 launches happening in the last quarter. With that in mind, ERA forecasts new home sales to reach between 5,500 to 6,500 units for all of 2024.”

Table 3: Potential new launches in 4Q 2024

Source: ERApro, ERA Project Marketing, ERA Research and Market Intelligence

“The rental market appears to have bottomed out, registering its first rental price growth after 3 quarter of decline. We have also observed a surge in non-landed rental contracts. But in 3Q 2024, we saw the completion of 3,953 private residential (including ECs) units which will add more leasing inventory in the market, providing tenants more options in the near futures and may help keep rental price growth in check.”

URA Private Property Index

The All-Residential Property Price Index (PPI) decreased by 0.7% 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.

In the non-landed private home segment, prices rose 0.1% q-o-q in 3Q 2024. This continues 2Q 2024’s trajectory, 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 0.8% q-o-q uptick in 3Q 2024. In contrast, prices in the Outside Central Region (OCR) remained unchanged q-o-q, while the Core Central Region (CCR) saw a slight drop of 1.1% q-o-q.

In the landed property sub-market, prices shrank by 3.4% q-o-q in 3Q 2024, reversing the 1.9% q-o-q growth rate registered for 2Q 2024.

Chart 1: URA Private Property Price Indexes

Source: URA, ERA Research and Market Intelligence

Table 4: Change in URA Private Property Price Indexes for 2Q 2024 and 3Q 2024

Source: URA, ERA Research and Market Intelligence

Transaction Volume

Transaction numbers for all private properties showed a small uptick in 3Q 2024. Based on latest figures released by URA, a total of 5,372 private homes were moved on the primary and secondary market. This represents an 9.3% q-o-q increase from the 4,915 units sold in 2Q 2024.

Notably, this uptick in transaction volume contrasts earlier findings from URA’s flash data, which projected a total of 4,372 private homes sold in 3Q 2024, or a 11.0% q-o-q decline from the previous quarter.

On an annual basis, overall private home transaction numbers increased by 3.3% y-o-y in 3Q 2024, up from the 5,201 units in 3Q 2023.

New Homes (Excluding ECs)

New home sale picked up in 3Q 2024 amid more new home launches. Developers launched 1,284 units in 3Q 2024, more than doubling that in 2Q 2024. This increase was spurred by the debut of three new home launches in the quarter – SORA, Kassia, and 8@BT. Correspondingly, developers sold 1,160 units in 3Q 2024, marking a 60% q-o-q increase.

Chart 2: New Homes Launched and Sold (Excluding ECs)

Source: URA, ERA Research and Market Intelligence

Executive Condominium

Amid the lack of new Executive Condominium (EC) projects launched, developers sold 104 EC units in 3Q 2024. This figure represents a 28.8% q-o-q drop from the 146 units sold in 2Q 2024.

Resale and Sub-sales (excluding ECs)

Source: URA, ERA Research and Market Intelligence

Sales of private homes (excluding ECs) continue to be largely driven by resale transactions. Based on URA Realis data, resale transactions accounted for 71.9% of all private residential sales in 3Q 2024, closely aligning with the 77.4% share of 2Q 2024.

Likewise, the number of private homes (excluding ECs) transacted on the resale market rose slightly by 1.5% q-o-q, from 3,802 units in 2Q 2024 to 3,860 units in 3Q 2024.

In contrast, sub-sales of private homes (excluding ECs) fell in the quarter. Based on URA’s latest data, a total of 352 sub-sale transactions were recorded for 3Q 2024, reflecting a 10.2% q-o-q decline from the 388 transactions in 2Q 2024.

Despite these changes, buyer demand in the secondary market remained robust as the price gap between new launches and resale/sub-sale non-landed private homes remains significant. According to caveat data, the gap between median per square foot (psf) prices between the two is still substantial despite narrowing from 48.9% in 3Q 2023 to 31.6% in 3Q 2024.

Landed Homes

Table 4: Landed homes sold in each quarter

Source: URA, ERA Research and Market Intelligence

Prices of landed properties decreased by 3.4% in 3Q 2024, reversing the 1.9% increase in the previous quarter. In the same vein, the number of landed homes sold fell 9.6% q-o-q to 423 units in 3Q 2024. Landed home prices were dragged lower by the sale of 16 units, typically with shorter balance lease, for less than $1,000 psf this quarter. In additional, there was also an outlier freehold transaction sold for $42,000.

Leasing

Rentals of private residential properties increased by 0.8% in 3rd Quarter 2024, after three consecutive quarter of decline. Non-landed properties rents increased by 0.5% in 3Q 2024, compared with the 0.8% decrease in the previous quarter. Landed properties rents increased by 3.2% in 3Q 2024, compared with the 0.9% decrease in the previous quarter.

Rentals of non-landed properties in CCR decreased by 1.6% q-o-q in 3Q2024. Rentals in RCR and OCR increased by 1.7% and 2.2% q-o-q, following a decline last quarter.

A total of 24,121 non-landed rental contracts were recorded in 3Q 20242 marking a 22.2% q-o-q increase. This is the highest seen since 3Q 2022, where 24,283 contracts were lodged.

The rental market appears to have bottomed out, registering its first rental price growth after 3 quarter of decline. We have also observed a surge in non-landed rental contracts. But in 3Q 2024, we saw the completion of 3,953 private residential (including ECs) units which will add more leasing inventory in the market, providing tenants more options in the near futures. This could help keep rental price growth in check.

For media enquiries, please contact:

Eugene Lim, Key Executive Officer, ERA Singapore

Email: [email protected]