Singapore's Private Home Market: A Quarter of Modest Growth Amidst Falling Sales.
Singapore's Private Home Market: A Quarter of Modest Growth Amidst Falling Sales
Singapore's private housing market has shown signs of resilience in the first quarter of 2024, with a modest price growth of 1.5%, despite a 20% decrease in sales volume compared to the previous quarter. This growth follows a 2.8% increase in the last quarter of 2023, as reported by the Urban Redevelopment Authority (URA) on April 1st.
Industry experts like Chia Siew Chuin from JLL and Leonard Tay from Knight Frank Singapore attribute the sustained price growth to market resilience, high land and construction costs, and a stabilizing trend in anticipation of an influx of approximately 10,000 private homes in 2024. Tricia Song from CBRE highlights the rise in buyer selectiveness amidst uncertain economic conditions, noting a 34.5% increase in average private home prices since Q1 2020.
The first quarter saw landed home prices outperform other sectors with a 3.4% increase, supported by local upgrading aspirations, limited supply, and rising construction costs. Non-landed homes in the Core Central Region (CCR) experienced a 3.1% price increase, driven by significant transactions such as the resale of two units at The Ritz-Carlton Residences Singapore Cairnhill, each fetching S$16.5 million.
The suburban Outside Central Region (OCR) and the city-fringe Rest of Central Region (RCR) saw more moderate price increases of 0.4% and 0.2%, respectively. Notable sales in these regions include the Lentor Mansion project, which sold three-quarters of its units at an average of S$2,278 psf.
Despite the overall positive trend, the market is showing signs of caution, with Singaporeans and PRs making up 98.6% of buyers and foreign purchases declining. The total transaction volume for Q1 stood at 3,482 units, marking a continued trend of declining sales.
Experts like Marcus Chu from ERA Singapore and Christine Sun from OrangeTee Group suggest that buyers are becoming more cautious due to economic uncertainty, rising retrenchment numbers, and high-interest rates. Some are deferring purchases in hopes of better deals if interest rate cuts occur in the latter half of 2024.
Looking ahead, Sun predicts a steady price growth of around 3 to 6% in 2024 and anticipates the launch of six to nine large projects. The URA is set to release its full set of property market data for Q1 on April 26th, which will provide further insights into the evolving landscape of Singapore's private housing market.
In summary, while the private home market in Singapore continues to grow, the pace has slowed, and sales have fallen. The market's resilience is evident, but caution prevails among buyers, suggesting a period of stabilization and potential opportunities for those seeking to invest in the property sector. The upcoming URA data release will be crucial in shaping the outlook for the rest of the year.
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