In the first quarter of 2024, Singapore's private residential market experienced a modest increase, with a quarter-on-quarter growth rate of 1.4%, the smallest quarterly increase since the third quarter of 2021. This reflects the impact of the Lunar New Year holiday and macroeconomic factors. According to data from the Urban Redevelopment Authority (URA), this growth rate is significantly lower than the previous quarter's 2.8%.
Among different types of private residences, non-landed private home prices rose by 1%, significantly lower than the previous quarter’s 2.3%. Geographic segmentation shows that prices in the Core Central Region (CCR), representing high-end private homes, increased by 3.4% quarter-on-quarter, slightly below the previous quarter’s 3.9%. In contrast, the Rest of Central Region (RCR), representing mid-tier private homes, saw a slight recovery in the first quarter, rising by 0.3%, after a 0.8% decrease in the previous quarter. The Outside Central Region (OCR), representing mass market private homes, saw a modest increase of 0.2%, significantly lower than the previous quarter’s 4.5%.
The supply of new private home projects remained abundant in the first quarter, with developers launching 1,304 units, higher than the 1,060 units in the previous quarter. Sales of new private home units also increased, with developers selling 1,164 units in the first quarter, up 6.6% quarter-on-quarter.
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Ismail Gafoor, CEO of PropNex Realty, noted that the first quarter is typically a slow period for real estate due to the Lunar New Year holiday and cautious market sentiment, which led to a narrower price increase. He explained that despite market pressures, demand for high-end resale private homes remains strong, largely driven by foreign buyers. Despite tightening regulations on Additional Buyer’s Stamp Duty (ABSD) for foreign buyers in April last year, luxury homes still attracted significant foreign investment, with approximately 21.9% of high-end private homes purchased by foreign buyers in the first quarter.
Experts anticipate that despite market challenges, high-end private homes may outperform the mid-tier and mass market segments this year. The price increase for landed homes also shows signs of slowing, narrowing from 4.6% in the last quarter of the previous year to 2.6% in the first quarter.
Regarding private home rents, there was a continuous decline for the second quarter, with an overall decrease of 1.9%. Specifically, rents for non-landed and landed private homes fell by 1.6% and 4.2%, respectively, continuing the trend from the previous quarter.
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The URA stated that geopolitical conflicts could impact global supply and demand, leading to uncertainties in economic outlooks. Singapore's mortgage rates are expected to remain higher than the average of the past ten years, and buyers need to remain cautious in their financial planning.
For the HDB resale market, prices and transaction volumes also showed growth in the first quarter. Resale prices of HDB flats increased by 1.8% quarter-on-quarter, while transaction volumes significantly increased by 8.0%. This growth was primarily driven by transactions of larger HDB units. According to Sun Yanqing, Chief Research and Strategy Director at OrangeTee & Tie, the Housing Development Board reduced the number of pre-purchase HDB sales events annually, leading more first-time buyers to purchase from the secondary market, increasing the demand for resale flats.
Additionally, as more private homeowners complete their 15-month waiting period, they are eligible to buy in the HDB resale market, further driving up demand. In the first quarter, the number of HDB units resold for over one million dollars reached 185, setting a new historical record.
