SINGAPORE: Private home prices in Singapore rose 1.4 per cent in the first quarter of 2024, down from the 2.8 per cent in the previous quarter, according to figures released by the Urban Redevelopment Authority (URA) on Friday (Apr 26).
Noting that this was the slowest quarterly gain since the third quarter of 2021, one analyst said this was an indication of "stability" in the housing market.
But at the same time, Mr Lee Sze Teck - Huttons senior director of data analytics - said property prices have gone up by 49.6 per cent since a low in Q2 2017.
The price increase of landed properties outstripped that of non-landed homes (2.6 per cent vs 1 per cent) in the first quarter of the year, said URA.
Broken down further, prices of non-landed properties in the core central region (CCR) increased by 3.4 per cent, while prices of non-landed properties in the rest of central region (RCR) and outside central region (OCR), went up by 0.3 per cent and 0.2 per cent respectively in Q1 2024.
The price moderation from Q4 2023 to Q1 2024 is likely due to relatively muted transaction volumes. Propnex CEO Ismail Gafoor attributed this "lack of impetus" from buyers to the seasonal lull at the start of the year and the Chinese New Year holidays.
But beyond the festive slowdown, there may be larger factors at play, said Mr Marcus Chu, chief executive officer of ERA Singapore.
"More prospective homebuyers may be holding back on home purchase plans in view of the stronger economic headwinds, geopolitical instability, rising retrenchment exercises and higher-for-longer interest rates," he said.
Mr Lee of Huttons classified buyers in the market into two groups: Those willing to pay more for a large unit and those who are quantum-sensitive.
The first group, who are on the hunt for space and willing to pay, led to higher prices in the landed market segment and CCR, said Mr Lee. He pointed to the 17 units sold at landed housing development Pollen Collection, at an average of S$3.7 million each, with an average land size of 1,724 sq.
The second group of buyers are those looking for a non-landed home with a budget of around S$2 million, a "sweet spot price" for many first-time buyers and HDB upgraders.
02:15 Min
Land supply for private housing has been raised for the first half of next year. This means a supply of nearly 5,500 units. Analysts said this could help stabilise property prices in Singapore in the medium term. Alif Amsyar reports.
According to URA, developers launched 1,304 uncompleted private residential units, excluding executive condominiums, for sale in this year's first quarter, compared to the 1,060 in the previous quarter.
ERA's Mr Chu said the successive project launches in preceding months may have led buyers to a "certain level of decision paralysis", with buyers taking time to compare and analyse before purchasing.
The Government Land Sales (GLS) supply for private housing increased further in 1H 2024, with the release of 5,450 units - marking the highest supply on the confirmed list in a single GLS programme since 2H 2013.
"The increased private housing supply from the GLS Programme will be ready for sales launch in the coming year, to cater to purchase demand and help maintain price stability in line with economic fundamentals," said URA.
Analysts forecast that prices for private home prices will remain elevated, but a better economic outlook in 2024 could boost buyer confidence.
"The market may only see up to 30 launches and between 7,000 and 8,000 launched units in 2024," said Mr Lee, similar to last year's 26 project launches and 7,551 launched units.
While there may not be any cut to interest rates in the second quarter of the year, he said the impact of the high for longer interest rates is "likely to be muted" as many buyers have become accustomed to it.
"Economic conditions are (forecast) to be better in 2H 2024 and that may boost the sentiments and confidence of buyers," Mr Lee added.
Barring unforeseen circumstances, he said developers may sell up to 7,000 new homes while prices are expected to be stable, increasing up to 5 per cent in 2024.
Similarly, Mr Chu said that despite lower land prices in the first quarter of the year, factors such as a more fragmented supply chain, sustainability considerations, and higher-for-longer interest rates will likely keep new home prices elevated
"Home prices may have stabilised, but overall cost has increased substantially."
ERA forecasts private home prices to rise between 4 per cent to 6 per cent year-on-year by the fourth quarter of 2024, noted Mr Chu.
"For the whole of 2024, new home sales could reach between 7,000 to 8,000 units, while the total resale and sub-sale transactions could range between 12,000 and 13,000 units.”
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Noting that this was the slowest quarterly gain since the third quarter of 2021, one analyst said this was an indication of "stability" in the housing market.
But at the same time, Mr Lee Sze Teck - Huttons senior director of data analytics - said property prices have gone up by 49.6 per cent since a low in Q2 2017.
The price increase of landed properties outstripped that of non-landed homes (2.6 per cent vs 1 per cent) in the first quarter of the year, said URA.
Broken down further, prices of non-landed properties in the core central region (CCR) increased by 3.4 per cent, while prices of non-landed properties in the rest of central region (RCR) and outside central region (OCR), went up by 0.3 per cent and 0.2 per cent respectively in Q1 2024.
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The price moderation from Q4 2023 to Q1 2024 is likely due to relatively muted transaction volumes. Propnex CEO Ismail Gafoor attributed this "lack of impetus" from buyers to the seasonal lull at the start of the year and the Chinese New Year holidays.
But beyond the festive slowdown, there may be larger factors at play, said Mr Marcus Chu, chief executive officer of ERA Singapore.
"More prospective homebuyers may be holding back on home purchase plans in view of the stronger economic headwinds, geopolitical instability, rising retrenchment exercises and higher-for-longer interest rates," he said.
Mr Lee of Huttons classified buyers in the market into two groups: Those willing to pay more for a large unit and those who are quantum-sensitive.
The first group, who are on the hunt for space and willing to pay, led to higher prices in the landed market segment and CCR, said Mr Lee. He pointed to the 17 units sold at landed housing development Pollen Collection, at an average of S$3.7 million each, with an average land size of 1,724 sq.
The second group of buyers are those looking for a non-landed home with a budget of around S$2 million, a "sweet spot price" for many first-time buyers and HDB upgraders.
02:15 Min
Land supply for private housing has been raised for the first half of next year. This means a supply of nearly 5,500 units. Analysts said this could help stabilise property prices in Singapore in the medium term. Alif Amsyar reports.
According to URA, developers launched 1,304 uncompleted private residential units, excluding executive condominiums, for sale in this year's first quarter, compared to the 1,060 in the previous quarter.
ERA's Mr Chu said the successive project launches in preceding months may have led buyers to a "certain level of decision paralysis", with buyers taking time to compare and analyse before purchasing.
The Government Land Sales (GLS) supply for private housing increased further in 1H 2024, with the release of 5,450 units - marking the highest supply on the confirmed list in a single GLS programme since 2H 2013.
"The increased private housing supply from the GLS Programme will be ready for sales launch in the coming year, to cater to purchase demand and help maintain price stability in line with economic fundamentals," said URA.
Related:
OUTLOOK FOR 2024
Analysts forecast that prices for private home prices will remain elevated, but a better economic outlook in 2024 could boost buyer confidence.
"The market may only see up to 30 launches and between 7,000 and 8,000 launched units in 2024," said Mr Lee, similar to last year's 26 project launches and 7,551 launched units.
While there may not be any cut to interest rates in the second quarter of the year, he said the impact of the high for longer interest rates is "likely to be muted" as many buyers have become accustomed to it.
"Economic conditions are (forecast) to be better in 2H 2024 and that may boost the sentiments and confidence of buyers," Mr Lee added.
Barring unforeseen circumstances, he said developers may sell up to 7,000 new homes while prices are expected to be stable, increasing up to 5 per cent in 2024.
Similarly, Mr Chu said that despite lower land prices in the first quarter of the year, factors such as a more fragmented supply chain, sustainability considerations, and higher-for-longer interest rates will likely keep new home prices elevated
"Home prices may have stabilised, but overall cost has increased substantially."
ERA forecasts private home prices to rise between 4 per cent to 6 per cent year-on-year by the fourth quarter of 2024, noted Mr Chu.
"For the whole of 2024, new home sales could reach between 7,000 to 8,000 units, while the total resale and sub-sale transactions could range between 12,000 and 13,000 units.”
Continue reading...