SINGAPORE - Private residential property prices continued to moderate in the first quarter of 2024, as buyers’ resistance grew in the face of higher prices amid softer economic conditions, slowing wage growth and higher-for-longer interest rates.
Private residential property prices rose 1.4 per cent in the first quarter, according to figures from the Urban Redevelopment Authority (URA) released on April 26. This is below flash estimates of 1.5 per cent growth and down from 2.8 per cent growth in the fourth quarter of 2023, due in part to lower transaction volumes.
Cushman & Wakefield head of research Wong Xian Yang noted that the take-up rate has slowed slightly despite an appetite for new launches. “In the first quarter (of 2024), new major launches are on average about 39 per cent sold out, compared with the average take-up of 54 per cent in first quarter 2023,” he said, referring to launches of developments with 100 units and more.
Overall private residential sales volume fell by 2.4 per cent for the third straight quarter to 4,230 units in the first quarter of 2024. Resale transactions fell by 5 per cent quarter on quarter to 2,689 units, while sub-sales fell 8.3 per cent to 377 units.
Even though new sales transactions held up, gaining 6.6 per cent quarter on quarter to 1,164 units, this is the slowest first-quarter sales since 762 units were transacted in the first quarter of 2008.
But Ms Chia Siew Chuin, JLL’s head of residential research for Singapore, noted that “despite the tempered price growth, the price uptrend amid a decline in overall sales volume underscores the resilience of underlying demand, reflecting healthy household liquidity”.
Transaction volumes in the prime district sank 18.7 per cent quarter on quarter to 605 units due to a lack of major launches in the first quarter of 2024 and the property curbs, while sales in the city fringe shed 5 per cent to 1,148 units, according to Cushman & Wakefield.
Mr Marcus Chu, chief executive officer at ERA, noted that ample new launch choices may have led to “decision paralysis among some buyers”. He said: “This is evident as the number of unsold private residential units jumped 17.8 per cent in the first quarter, with the suburbs accounting for 38.6 per cent of unsold stock.”
In the first quarter, the total stock of unsold new homes rose to 20,204 units, crossing the 20,000-unit mark for the first time since first quarter 2021. This signifies an easing in the prolonged tight supply situation, even though unsold stock remains at 46.5 per cent below the pre-Covid-19 peak of 37,779 units in the first quarter of 2019, Ms Chia said.
Nevertheless, Mr Chu said, a buoyant HDB market continues to support upgrader demand, particularly in the suburbs, which accounted for 58.6 per cent of total transactions in the first quarter, the highest seen since the third quarter of 2015.
Transaction volume in the suburbs rose 4 per cent to 2,477 units, fuelled by successful new launches in March such as Lentor Mansion, which accounted for almost half of this submarket’s new sales volume in the first quarter. The project is 77 per cent sold out at a median price of $2,269 per sq ft (psf), Mr Wong said.
Landed home prices rose 2.6 per cent in the first quarter after a 4.6 per cent increase in the preceding quarter. Non-landed home prices gained 1 per cent in the first quarter, down from the 2.3 per cent growth in the previous quarter.
The prime district non-landed market outperformed the other two submarkets with a price growth of 3.4 per cent in the first quarter, compared with a 3.9 per cent gain in the fourth quarter of 2023.
This was due to new sale transactions at 19 Nassim, Watten House, and Cuscaden Reserve, which was relaunched in mid-March, as well as two resale deals at The Ritz-Carlton Residences Singapore Cairnhill, which fetched $16.5 million ($5,397 psf) each, PropNex head of research and content Wong Siew Ying said.
Ms Chia added, that while foreign buyers have been sidelined by the additional buyer’s stamp duty hike, local buyers continue to snap up prime district homes.
In comparison, non-landed home prices in the city fringe and the suburbs recorded marginal gains, up by 0.3 per cent and 0.2 per cent, respectively.
Suburban non-landed home prices grew at a slower clip despite several new launches in the first quarter. The 1.8 per cent jump in HDB resale prices in the first quarter, the strongest growth in five quarters, helped support upgrader demand for non-landed suburban condos.
But the price growth for non-landed suburban condos was capped as buyers have turned price-sensitive, Ms Chia said. “The 27.8 per cent quarter-on-quarter jump in suburban new sale transactions in the first quarter, along with firm new launch prices at around $2,100 to $2,200 psf, helped keep prices steady,” she said.
PropNex chief executive Ismail Gafoor noted that despite muted transaction volumes in the first quarter, private home prices have generally held up, supported by a number of new launches and resale transactions in the high-end segment.
“We expect home sales to pick up in the second half, when more new launches come on,” he said.
Meanwhile, private home rentals continued to moderate in the first quarter, with the URA’s overall rental index for private homes dipping by 1.9 per cent quarter on quarter, following a 2.1 per cent drop in the previous quarter.
This is the second straight quarter of rental decline from the peak in the third quarter of 2023, and after 12 quarters of rental growth from the fourth quarter of 2020.
Rents are projected to fall further on softer leasing demand, growing rental housing stock and stiffer competition for tenants, Ms Chia said. In the first quarter 2024, 241 units of private homes were completed and another 8,404 units are expected to be ready by the end of 2024.
