Singapore New Home Price Growth Slows as Half-Year Sales Hit All-Time Low

Average prices for new private homes in Singapore rose 0.9 percent during the second quarter of 2024, slowing from the 1.4 percent growth of the previous quarter, according to data released by the Urban Redevelopment Authority on Friday.

Developers sold 725 private homes (excluding the hybrid public-private executive condo segment) in the second quarter, down sharply from the 1,164 units sold during the previous quarter, the URA said in a release. The April-June total was the lowest quarterly tally since the 690 deals recorded in the fourth quarter of 2022.

The 1,889 new homes sold in the first half set a record low for a half-yearly total, trailing the 1,977 units sold in the second half of 2008 amid the global financial crisis, according to PropNex Realty.

The local brokerage attributed the second quarter slowdown to a reduction in project launches, with developers placing 634 new homes for sale during the period compared with 1,304 units in the first three months of the year. The resale segment, meanwhile, accounted for a record-high 77.4 percent of all private housing transactions in the second quarter, PropNex CEO Ismail Gafoor said in a release.

“We expect the resale market to drive private home sales this year, and project that about 12,000 to 13,000 resale private homes could be transacted in the whole of 2024,” Gafoor said.

The Hill Drives RCR

The city-fringe Rest of Central Region saw the highest quarterly increase in non-landed private home prices, which rose 1.6 percent from the first quarter. JLL attributed the modest growth to The Hill @ One-North, where 43 out of the 142 total units were sold at an average price of S$2,595 ($1,931) per square foot during the April launch weekend for the Kingsford Development project at Slim Barracks Rise.

Prices in the Core Central Region eased 0.3 percent after a 3.4 percent quarterly jump to begin the year. The hike in additional buyer’s stamp duty weighed on foreign buyers as the absence of major new CCR launches compounded the lack of interest during the quarter, said Chia Siew Chuin, head of residential research at JLL Singapore.

The suburban Outside Central Region saw prices inch up 0.2 percent in the second quarter amid a dearth of big launches and a backdrop of homebuyers growing more selective and price-sensitive, according to JLL.

“The overall price growth was mainly driven by the landed market, bolstered by the aspiration of local buyers to upgrade, high construction costs and a limited supply of landed homes,” Chia said.

Stable Trajectory Seen

Singapore’s steady economy and favourable employment prospects are expected to foster a stable growth trajectory for private home prices during the rest of the year, according to OrangeTee Group.

“Most consumers may remain prudent in their financial decision-making even though inflationary pressures are easing,” said Christine Sun, chief researcher and strategist at OrangeTee. “Since interest rates have not decreased as rapidly as expected, most buyers will likely continue to opt for affordable housing options, such as resale or smaller new private homes.”

OrangeTee anticipates a moderate uptick in new home sales, driven by the launch of several major projects in the second half, but full-year new sales volume is seen dropping to 5,000-6,200 units from the 15-year low of 6,452 in 2023.