SINGAPORE – Private residential property prices in Singapore rose at a slower clip in the first quarter of 2024 as transaction volumes shrank, weighed down by rising retrenchments, slowing wage growth and still-high interest rates.
Between January and March, private residential property prices rose 1.5 per cent, after a 2.8 per cent gain in the fourth quarter of 2023, according to Urban Redevelopment Authority (URA) flash estimates released on April 1.
The number of units sold shrank to 3,482 in the first quarter, down 20 per cent from the fourth quarter of 2023, and down 16 per cent year on year, dragged down by slower resale and sub-sale transactions, analysts said.
A sub-sale is recorded when a buyer resells a property bought directly from a developer, before a project is completed.
Developer sales have been tepid, hitting a 15-year low of 6,421 units in 2023 on weak economic conditions, increasing resistance to high price points, and several rounds of cooling measures, analysts added.
Ms Tricia Song, CBRE’s head of research for Singapore and South-east Asia, noted that new home sales picked up in March after a lull in January and February, as two new launches in the Lentor area – Lentoria and Lentor Mansion – collectively sold nearly 460 units that month.
“However, we see increasing buyer selectiveness amid uncertain economic conditions and as average private home prices have risen 34.5 per cent since the first quarter of 2020,” she said.
Buyers are taking more time to decide, given the increase in housing options. More new homes are being launched and more resale listings are hitting the market, said property firm ERA Singapore’s key executive officer Eugene Lim.
“Others are deferring home purchases, hoping for better deals if interest-rate cuts materialise in the second half of 2024,” he added.
Analysts say overall private residential price growth was underpinned primarily by landed home prices, which rose 3.4 per cent in the first quarter after a 4.6 per cent increase in the preceding quarter.
Prices of non-landed properties gained 1 per cent in the first quarter, down from the 2.3 per cent growth in the previous quarter.
Quarterly gains were not significant in the suburbs and city fringe areas, which rose less than 1 per cent. In the suburbs, prices of non-landed private homes rose just 0.4 per cent, down from the 4.5 per cent growth in the previous quarter. Prices of those in the city fringe edged up 0.2 per cent, compared with a 0.8 per cent drop in the fourth quarter of 2023.
Prices of non-landed private homes in the prime district climbed 3.1 per cent in the first quarter of 2024, compared with a 3.9 per cent increase in the preceding quarter.
Ms Chia Siew Chuin, JLL’s head of residential research for Singapore, cited strong sales at Bukit Timah condominium Watten House, while Leedon Green in Holland saw a 2.3 per cent increase in median prices in the first quarter.
“Soon-to-be completed projects such as Midtown Bay (in Beach Road), Midtown Modern (in Tan Quee Lan Street, in Bugis) and Ikigai (in Novena) also recorded quarterly median price increases of 15.4 per cent, 11.2 per cent and 2.3 per cent, respectively, in the first quarter,” she added.
Cushman & Wakefield Singapore and South-east Asia head of research Wong Xian Yang said the prime district “could be seeing signs of catch-up growth, given its historical underperformance”.
“Prime district prices grew by about 11 per cent cumulatively over 2021 to 2023, starkly behind the city fringe and the suburbs, which grew by over 30 per cent each,” Mr Wong said.
PropNex head of research and content Wong Siew Ying believes that non-landed home prices in the prime district could see a further increase, when additional transactions from the relaunched Cuscaden Reserve in the Orchard area are factored into the first-quarter data. “Cuscaden Reserve has so far sold 80 units at an average price of slightly above $3,000 psf (per sq ft) since its sales relaunch on March 16,” she said.
Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, expects new home demand to remain resilient, as more projects are slated for launch in the second quarter of 2024.
Between six and nine large projects, each with more than 500 units, could be launched in 2024. This may result in sales exceeding 1,000 units during certain months.
In comparison, six large projects, excluding executive condominiums, were launched in 2023, Ms Sun said.
