Resale prices of private homes outside the Central District and in the other Central Districts fell by 1.2 per cent and 0.2 per cent respectively in January. Resale prices for private homes in the core Central District rose by 2.5 per cent year-on-year.

The Lunar New Year holiday and property cooling measures led to the first decline in non-landed private resale prices in over two years, with resale prices falling by 0.6 per cent in January, while transaction volumes fell for the fourth consecutive month, slipping by 22.6 per cent year-on-year.

Analysts believe that the decline is only temporary, as prices are expected to remain stable for the rest of the year due to limited supply of new private homes and unabated demand.

Forecasts show that overall resale prices for non-landed private homes fell in January for the first time since July 2020.

Resale prices for private homes in the Outer Central Region (OCR), representing mass market private homes, and in the Other Central Region (RCR), representing mid-range private homes, fell by 1.2 per cent and 0.2 per cent respectively in January. Resale prices in the Core Central Region (CCR), which represents the upper end of the private sector, rose by 2.5 per cent year-on-year.

Compared to the same month last year, overall non-landed private resale prices rose by 8.6 per cent, while resale prices of high-end, mid-range and mass market private homes increased by 6.4 per cent, 7.8 per cent and 9.7 per cent respectively.

The decline in prices was mainly due to a lower number of viewings during the Lunar New Year period and a corresponding reduction in transaction volumes.

In January, 519 units changed hands, 22.6 per cent less than in December last year. If compared with January last year, this represents a decrease of 43.2 per cent. The largest number of units changed hands outside of the Central District, with popular private homes accounting for 48.7 per cent of total transactions, and mid-range and high-end private homes accounting for 30.6 per cent and 20.7 per cent respectively.

The property cooling measures introduced in September last year seem to have worked, with homeowners having to wait 15 months after selling their private homes before they can buy a resale HDB flat, and high interest rates discouraging some homeowners planning to sell their homes.

House prices remain high, especially for new private homes, making it costly to buy a replacement home. In addition, some homeowners may be keeping their homes for rent because rental income remains good.

Demand for mass market private housing may have been affected by the cooling measures, with transactions falling 37% year-on-year as a result, the largest drop in the private housing category.

Some homeowners planning to move from private to HDB flats held off selling their homes due to the new regulations, reducing the supply of resale private homes coming onto the market.

With the economic outlook still uncertain and interest rates expected to rise gradually, buyers will remain cautious. They will also take into account the recent increase in the buyer's stamp duty rate and the impact on transaction prices when purchasing more expensive private properties.

Overall private resale prices are expected to remain relatively stable, with limited supply helping to support prices.

With more new private housing projects expected to be completed in the next few months, homeowners who are reluctant to reduce their prices may face price pressure at that time.

However, with the reopening of China's borders, there is likely to be an increase in Chinese buyers coming to the country to buy homes and if prices fall, this could be the time for buyers to enter the market.

Thirty new private housing projects are expected to be launched this year, twice as many as last year, and the prices of these new private homes are expected to be higher than the resale prices of older projects nearby, potentially driving up prices in the overall property market.