Singapore Private Home Prices Surge in Q4 on Rate Cuts, 3-5% 2025 Growth Predicted

Prices for private homes in Singapore rose 2.3 percent in the fourth quarter of 2024, posting the strongest quarterly price growth of 2024 and reversing the previous period’s 1.1 percent decline, according to flash estimates released Thursday by the country’s Urban Redevelopment Authority (URA).

The price jump was backed by a 25 percent increase in sales transactions following an 11 percent quarter on quarter decline in the previous three months. The rebound in home sales in the October through December period marked the only quarterly increase in housing deals of 2024, according to the URA, with analysts noting the shift in sentiment.

“The Singapore private residential market defied initial expectations with a strong finish in 2024, driven by pent-up demand and a slew of well-located new launches launched in the last quarter of the year,” Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield said.

While the fourth quarter performance sparks optimism for the new year, analysts say a moderation in expectations for interest rate cuts could temper market momentum.

Rate Cut Reaction

The unexpected rebound in pricing and deal volume in the most recent quarter was driven by declining interest rates and a recovering stock market, according to analysts.

“As interest rates started to fall with the US Federal Reserve announcing a 50-basis point cut in September 2024 followed by 25-basis point reductions in November and December, homebuyer activity in the new sales market swelled significantly in October and November 2024,” said Leonard Tay head of research in Knight Frank Singapore.

Tricia Song, head of research for Singapore and Southeast Asia at CBRE, pointed to a recovery in Singapore’s stock market during the period as triggering a wealth effect among homebuyers, with other analysts noting the appeal of some of the new projects launched from October through December.

According to Cushman & Wakefield, there were a total of 22 new launches – excluding the hybrid public-private executive condominium segment – in 2024, with a total stock of 6,302 units. Around 57 percent of these projects were launched in the fourth quarter.

“Between January to December 2024, a total of 8 out of 16 major projects (50 percent) managed to sell more than 50 percent of their units during their month of launch. Notably, 5 out of 8 of these projects were launched in Q4 2024,” Wong said.

“The lowering of interest rates by the US Federal Reserve from September onwards was the catalyst that motivated homebuyers sitting on the fence into a purchase decision. Developers took the opportunity to launch projects once this trend gained traction,” Knight Frank’s Tay told Mingtiandi.

With buyers showing a growing appetite for new homes, Singapore’s URA has already moved to increase the country’s supply of private housing projects.

The Government Land Sales (GLS) Programme for the first half of 2025 will provide a potential pipeline of 8,505 homes, which is up from about 8,140 units in the second half of last year.

The approximately 5,030 private housing units, including executive condos, confirmed to be tendered in the land sale programme for the first half of 2025, represents nearly a 60 percent increase from the average half-year supply on the GLS confirmed list from 2021 to 2023. The confirmed list is a set of government-determined land parcels ready for sale.

Cooler Market in 2025

“Developers who have finalized their showflat locations and marketing strategies may look to launch their projects in the first half of 2025, to capitalize on the current boost in market sentiments,” Wong told Mingtiandi.

While developers finished 2024 with a strong final quarter, the full year continued a trend of slower growth in home prices.

The uptick in the fourth quarter lifted 2024 home prices to 3.9 percent above levels a year earlier, after housing rates had grown 6.8 percent in 2023 and increased 8.6 percent on an annual basis in 2022.

Sales of private homes also moderated last year, falling by about 14 percent compared to the annual average volume from 2021 through 2023.

Despite the strong uptick of sales and prices in the fourth quarter of the year, URA still cautioned of uncertainty this 2025, citing still-elevated global interest rates and possible renewed restrictions to global trade as downside risks for 2025.

With the US Federal Reserve having indicated last month that it expects fewer cuts in interest rates this year, analysts expect moderate increases in Singapore home prices through the end of 2025.

“Declining mortgage rates have slightly boosted buyer affordability, but further affordability improvements in 2025 may be muted, as the pace of interest rate declines is expected to decelerate,” Cushman & Wakefield’s Wong said.

Consultancies projected private home prices to grow by around 3 to 6 percent for 2025, with Knight Frank estimating a 3 to 5 percent increase and Cushman and Wakefield forecasting a rise of around 3 percent.

“While general take-up rates across new projects are expected to improve, buyers could remain selective in 2025 amid a myriad of new launch options. Attractive developer pricing remains key to healthy new launch performance,” Song’s CBRE said.