Recently, the Singapore private residential market has shown some changes and trends, primarily influenced by expectations of interest rate cuts and the launch of more new private residential properties.
Firstly, according to preliminary estimates released by the Urban Redevelopment Authority, the quarter-on-quarter growth rate of private residential prices in Singapore slowed to 1.5% in the first quarter, lower than the level in the fourth quarter of the previous year. This trend indicates that expectations of interest rate cuts have led to more buyers adopting a wait-and-see attitude, opting to observe rather than actively purchase for the time being. At the same time, overall transaction volumes for private residential properties decreased by 20% quarter-on-quarter, continuing the declining trend from the previous year, particularly affected by the resale market, where transaction volumes saw a significant decline.
Secondly, price changes in private residential properties vary across different regions. The Core Central Region (CCR), representing high-end private residential properties, experienced the largest price increase, although still lower than the fourth quarter of the previous year, while prices for private residential properties in the Rest of Central Region (RCR), representing mid-tier properties, reversed their decline from the previous quarter. Conversely, the price increase in Outside Central Region (OCR), representing mass-market private residential properties, significantly slowed down, reflecting the performance of different market segments.
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Thirdly, the reduction in foreign buyers is also a factor affecting the market. The Additional Buyer's Stamp Duty (ABSD) for foreign buyers has been raised to 20%, leading to a decrease in the number of foreign buyers for high-end private residential properties. However, many locals and permanent residents still show interest in high-end private residential projects in the Core Central Region, especially those close to popular schools and offering good investment opportunities.
Looking ahead, analysts hold a cautiously optimistic view on the development of the private residential market for this year. They expect that with expectations of interest rate cuts and the launch of more new private residential properties, private residential prices will steadily rise, although the overall increase may be lower than last year. Nevertheless, demand for new private residential properties may remain resilient, especially considering that six to nine large-scale private residential projects with over 500 units each are slated for launch this year. However, due to high land and development costs, significant adjustments to new private residential property prices are unlikely, and it is expected that the growth in transaction volumes for private residential properties this year will be limited, ranging from 18,000 to 20,000 units.
