Prices Of All Private Residential Properties Record First Quarterly Decline Of 0.7% In Q3/2024 – Largest Quarter-on-quarter (Qoq) Contraction Since Q1/2020

Non-landed Home Purchases By Singaporeans Rose For Third Consecutive Quarter By 8.9% Qoq - Highest Since Q3/2023

Savills Research shares that the decline in the URA property index for all private residential properties comes after four consecutive quarters of increase. This is the largest contraction QoQ since the first quarter of 2020.

While prices of landed homes fell 3.4% on a QoQ basis after increasing for three consecutive quarters, prices of non-landed properties continued trending up for the fifth consecutive quarter by a mere 0.1% in Q3/2024. This was slower than the 0.6% growth in the previous quarter and was the slowest growth in the past five quarters.

Across non-landed homes in the three market segments, prices of homes in the Core Central Region (CCR) decreased by a larger 1.1% QoQ, as compared to 0.3% in the previous quarter. This may be due to the lack of significant launches in recent quarters, leading to lower new sales which are often priced higher than those in the secondary market. Lower foreign demand has also seen property prices in this market segment adjusting downwards.

In the Rest of Central Region (RCR), prices of non-landed homes continued its upward trend for the third consecutive quarter, but at a moderated pace of 0.8% in Q3/2024 compared to 1.6% in Q2. Prices of non-landed homes in Outside of Central Region (OCR), however, remained unchanged for the first time after increasing for six consecutive quarters. Nevertheless, on a year-on-year (YoY) basis, non-landed home prices across all three market segments continued to record increases.

Prices of the properties in Savills’ basket of luxury non-landed private residential projects declined marginally by 0.4% QoQ to S$2,582 psf in Q3/2024. It was unchanged in Q2/2024. This was in line with the movement of the URA price index of non-landed residential properties in CCR. Transaction volume have also decreased. On a YoY basis, prices contracted for the first time since Q4/2020, falling by 0.7%.

With the rebound in the number of units launched mainly in the RCR and OCR in Q3, which provided a wider variety of options to homebuyers, new sales expanded 60% QoQ. However, it was still 40.4% lower on a YoY basis. New sales in RCR and OCR grew by 70% and 72.7% QoQ respectively. For OCR, this was the second consecutive quarter that new sales have surpassed launches.

For CCR, this was the sixth consecutive quarter of decline. Despite this, new sales still exceeded launches in the market segment. New sales in CCR only constituted 4.7% of total new sales in the quarter, while those in RCR and OCR comprised 33.7% and 61.6% respectively.

Due to the lack of significant new launches and hike in the Additional Buyer’s Stamp Duty (ABSD) rates for foreigners, sales in the CCR have been severely impacted, with new sales continuing to fall. As demand for homes in CCR is largely driven by foreigners, who have now taken a backseat, things have appeared to be looking better for RCR and OCR, where the target market is largely Singapore residents.

With more new launches and interest rates starting to decline, sentiments from homebuyers may have turned positive, which have led to an improvement in new sales. This has seen the steady growth of non-landed home purchases of Singaporeans by 8.9% QoQ for the third consecutive quarter, which is the highest since Q3/2023.

Of the top five best-selling projects in Q3/2024, two of the new launches - Kassia and Sora - in the quarter took the top two positions. The other three projects were previously launched developments and included Hillhaven (launched in Q1/2024), Pinetree Hill (launched in Q3/2023) and Tembusu Grand (launched in Q2/2023).

George Tan, Managing Director, Livethere Residential, Savills Singapore says, “We observed renewed confidence from the stronger activity in the market, fuelled by the expectation of lower interest rates and positive buyer sentiment. The optimism in the market continues as upcoming launches are expected to drive activity towards the end of the year. Most of the non-landed private property buyers are Singapore citizens and permanent residents, including a notable number of younger buyers. Foreign purchases, however, remain limited, as the Additional Buyer’s Stamp Duty (ABSD) has dampened demand.”

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore comments, “Notwithstanding the global economic and business malaise, the private residential market here is expected to surprise counterintuitively. We see a new trend emerging where the sizes of new sales units amongst 99-year non-landed projects have risen significantly. This increase could have been borne out of the recent rise in HDB resale prices. From the end of 2020 till Q3/2024, HDB resale price rose by 39.5%. In contrast, median new sale prices of non-landed properties in the RCR and OCR rose by 28.3% and 29.2%. This narrowing in prices between the public and private domains of the market is the likely factor that is motivating HDB upgraders to buy into new sale properties for living in.”

“For 2025, we are forecasting prices to have a wider range, starting from a -1% to +5%. The negative change could materialise because the lower land prices developers have paid since 2023 are allowing them a buffer to adjust their launch prices to accommodate demand. However, the +5% may turn out to be the case if HDB resale prices continue to rise sharply, and if an even greater number of Singaporeans, particularly the baby boomers and the earlier group of Generation Xs decide to plough their savings into property on behalf of their children.”