Prices of private homes in Singapore saw a smaller increase of 1.1 per cent in the second quarter of 2024, as sales dwindled in recent months. Flash estimates from the Urban Redevelopment Authority (URA) showed private residential prices flattening in Q2, after rising 1.4 per cent in Q1 and 2.8 per cent in Q4 2023.
Prices are up 2.5 per cent so far this year, still climbing, albeit slower than the 3.1 per cent growth in the first half of 2023 and 4.2 per cent in H1 2022.The overall price index rise was led by growth in landed housing, where prices continued to increase 1.8 per cent in Q2 after climbing 2.6 per cent in Q1.
In the non-landed market, prices in the city fringe areas of the Rest of Central Region (RCR) rose the most, by 2.2 per cent after inching up 0.3 per cent in Q1. Suburban Outside Central Region (OCR) prices were flat, up 0.3 per cent following 0.2 per cent growth in the quarter before, while prime Core Central Region (CCR) prices slipped 0.2 per cent after jumping 3.4 per cent in Q1.
New home sales shrank in Q2 as developers held back on new launches. Secondary market sales improved across all three market segments, but different segments saw divergent price trends, noted Chia Siew Chuin, JLL’s head of residential research.
Amid limited new supply in the RCR, the median price of new non-landed homes rose 2.1 per cent during the quarter to S$2,616 per square foot (psf), while the median price of resale deals strengthened by 2.6 per cent. As a result, more sales were transacted for at least S$2,500 psf, pulling up prices for non-landed homes in the RCR.
In the suburban OCR, meanwhile, the number of non-landed homes that sold for a minimum of S$2,000 psf fell as unsold supply piled up, limiting price momentum, said Chia. This was despite underlying demand from HDB upgraders and strength in public housing prices – the HDB resale price index rose 2.1 per cent in Q2, faster than the 1.8 per cent increase in the previous quarter.
OCR prices are starting to moderate after surging in 2023, when they jumped 13.7 per cent and outperformed CCR and RCR growth at 1.9 per cent and 3.1 per cent, respectively, said Wong Xian Yang, Cushman & Wakefield’s head of research for Singapore and South-east Asia.
And at the top of the market in the CCR, a lack of price-driving projects, combined with discounts extended by some developers to move sales, put greater pressure on prime home prices, said JLL’s Chia. Overall non-landed sales that transacted at above S$3,000 psf declined in Q2.
Total market sales fell slightly to 4,215 units in Q2, from 4,230 units sold in the previous three months. Developers’ sales have been tepid. With only 1,843 units transacted in H1 2024 (up to mid-June), they are on track to be the lowest half-year developer sales on record.
But unlike 2008, secondary sales volumes are holding up, she noted. Price-conscious buyers have turned to the resale market as the price gap between primary and secondary stock widens. Secondary sales in Q2 2024 (up to mid-June) rose to 3,344 units, up from 3,066 units in Q1 and higher than the quarterly average for 2023, according to CBRE data.
Resale deals formed a higher proportion of sales at 76.4 per cent in Q2, up from 65.8 per cent in Q1, while new sales dipped to 16.9 per cent from 26.8 per cent over the same period, said Christine Sun, OrangeTee Group’s chief researcher and strategist.
That could also have skewed the overall price index lower, as new projects tend to pull prices up. Nicholas Mak, chief research officer at Mogul.sg, noted that median transacted prices of new non-landed homes fell 1.5 per cent to S$2,238 psf in Q2 from Q1, while that of resale deals rose 2.1 per cent to S$1,709 psf.
Islandwide, non-landed homes saw a 0.9 per cent increase in prices, compared to the 1 per cent rise in the previous quarter and 2.3 per cent in Q4 2023.
High-net-worth buyers are still in the market, with at least 11 non-landed sales valued at over S$10 million in Q2, compared to six such deals in the previous quarter, said SRI head of research and data analytics, Mohan Sandrasegeran.
Notably, landed home prices continued to rise, gaining 1.8 per cent in Q2 after a 2.6 per cent increase in Q1.
Foreign buyers are trickling back amid heightened geopolitical tensions, noted Lee Sze Teck, Huttons Asia’s senior director of data analytics. He estimated there were 72 foreigners who bought Singapore homes in Q2, 63.6 per cent higher than the 44 in Q1.
Private home prices are expected to show growth of between 1 and 5 per cent for 2024, while analysts have sliced forecasts for new home sales down to the 5,500 to 7,000 units range, from 7,000 to 8,000 units previously.
