URA Private Residential Flash Estimates

Overall price growth in the private residential market turned around and decreased in Q3 2024 as the URA All Residential Price Index fell 1.1% q-o-q, after an increase of 0.9% q-o-q in Q2 2024 and 1.4% in Q1 2024. This resulted in a total increase of 1.1% in the first nine months of the year.

The decrease was largely due to the lack of new launches in Q3 2024 at price points that moved the needle upwards. In Q3 2024, the major new launches included Kassia at Flora Drive, Sora at Yuan Ching Road and 8@BT in Bukit Timah Link. However, as the flash estimates are compiled based on transactions for units sold by developers up till mid-September, it is likely that the 83 units or 52.5% of 8@BT’s total has not been factored in. With a reported average of $2,719 psf from the units sold at 8@BT on the launch weekend of 21 September, the URA All Residential Price Index is expected to decline less than the 1.1% in Q3 2024, perhaps ending the quarter relatively flat when this statistic is released on 25 October 2024.

With the exception of the non-landed private home index for the Rest of Central Region (RCR), which grew by a very marginal 0.2% q-o-q, the rest of the other sub-indices also registered decreases. This signalled that prices of secondary sales in the resale market is generally no longer on the increase in a quarter without many new launches. The private home market has been quiet as homebuyers looking for homes remained cautious and would only purchase a new home that checked off most of the boxes in their lifestyle list. Otherwise, the majority of buyers, especially those buying for investment, continued to sit on the fence held back by high interest rates.

That said, the announcement of a 50-basis point interest rate cut in September 2024 by the US central bank could prove to be the shot-in-the-arm needed to move the private residential market. Notwithstanding that the effects of the interest rate cut are not likely to be immediate, but will mostly be felt from next year onwards, this might just be the impetus to tip homebuyers who are presently sitting on the fence into a purchase, especially those buying for their own occupation.

In the landed market, it is surprising that landed home prices shrank 3.8% q-o-q in Q3 2024, after having risen 1.9% in Q2 2024 and 2.6% in Q1 2024. A quick check on URA’s Realis portal show that quarterly median prices of landed homes islandwide rose from $1,711 psf (on land) in Q1 2024 to $1,775 psf in Q2 and $1,786 psf in Q3 (based on available transactions to-date 1 October 2024). Perhaps this could be due to URA’s methodology in the price index, as prices of landed homes are observed to continue to be supported by the housing aspirations of Singaporeans.

It is now probable that private home prices will likely end the year gravitating towards the lower end of Knight Frank’s 3% to 5% projection, i.e. at around 3% and about half the 6.8% annual increase in 2023. There are a few months left in 2024 for developers to launch projects that are highly anticipated, and an easing of mortgage rates (even though not dramatically immediate), could trigger purchases from homebuyers who have been waiting on the sidelines jolting the private residential market into more activity after what has been a subdued year thus far.