Singapore’s private home prices slip 1.1% in Q3; first drop since Q2 2023
Market watchers do not foresee further correction
PRICES of private homes in Singapore fell for the first time in five quarters since the second quarter of 2023, slipping 1.1 per cent in Q3.
The drop in residential prices was the largest fall since 2016, when prices fell 1.5 per cent. But market watchers do not see a further correction, and expect prices to bounce upwards in Q4 with several new launches lined up and interest rates falling.
Prices fell the most in the landed property segment, where home prices dropped 3.8 per cent and reversed a 1.9 per cent rise in Q2, and in the prime Core Central Region (CCR), where prices fell 1.5 per cent, extending their 0.3 per cent easing in the previous quarter.
Leonard Tay, Knight Frank Singapore’s head of research, attributed the Q3 decrease in prices to the lack of new launches at price points that moved the needle upwards.
After factoring in the latest launch, 8@BT, which came onto the market in the last two weeks of September, the URA price index may see a smaller decline or even end the quarter flat when final data is available on Oct 25, he said.
Bukit Sembawang’s Upper Bukit Timah project sold 52.5 per cent of its 158 units at an average price of S$2,719 per square foot (psf) over its launch weekend.
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The Q3 drop in private housing prices came after prices crept up 0.9 per cent in Q2, flash estimates released by the Urban Redevelopment Authority (URA) on Tuesday (Oct 1) showed.
Year to date, prices are up 1.1 per cent, moderating from the 3.9 per cent growth in the first nine months of 2023 and the 8.2 per cent climb between January and September 2022.
Tay found it surprising that landed home prices showed a 3.8 per cent fall in Q3, after having risen 1.9 per cent in Q2 and 2.6 per cent in Q1.
According to URA caveat data, median prices of landed homes islandwide rose from S$1,711 psf in Q1 to S$1,775 psf in Q2 and S$1,786 psf in Q3, he said.
“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,” Tay added.
Non-landed home prices fell by 0.3 per cent, after rising 0.6 per cent in the previous quarter and 1 per cent in Q1.
“Apart from the ongoing pressure from the Additional Buyer’s Stamp Duty hike, the quarter-on-quarter decline in CCR transactions in Q3 can be traced to the higher base in the previous quarter, lifted by price adjustments on projects (in) Sentosa and Cuscaden Reserve,” said Marcus Chu, ERA’s chief executive officer.
Rest of Central Region prices edged up 0.2 per cent, after a 1.6 per cent gain in the second quarter. In the suburban Outside Central Region, prices fell by 0.1 per cent after inching up by 0.2 per cent in Q2.
Total transaction volume in Q3 stood at 4,372 units, down 11 per cent from the 4,915 units in Q2 and 15.9 per cent lower than the 5,201 units sold in the year-ago period.
While new home sales remain “in the doldrums”, secondary sale volumes continued to hold up in Q3, an indication that there is still liquidity in the market, said Tricia Song, CBRE’s head of research for South-east Asia.
ERA’s Chu said: “Buyer demand in the secondary market stayed robust as the price gap between new launches and resale non-landed private homes remains significant.”
According to ERA’s analysis, the gap between average psf prices for new and resale non-landed private homes was 39.2 per cent in Q3 2024, still sizeable despite having shrunk from 52 per cent a year ago.
There were fewer private homes sold at higher price tags, Christine Sun, chief researcher and strategist at OrangeTee Group, said. Private homes transacted for at least S$5 million dropped from 273 units in Q2 2024 to 211 units in Q3 2024, she said.
Chu noted that about 71.7 per cent of new home transactions in Q3 fell below S$2.5 million. Homes priced under S$1.5 million accounted for 26.3 per cent of new home transactions.
For the full year, Wong Xian Yang, head of research for Singapore and South-east Asia at Cushman & Wakefield, expects prices to rise between 1 and 4 per cent, supported by resilient upgrading demand for private housing. Flash data released on Tuesday (Oct 1) showed HDB resale prices accelerated in Q3, rising 2.5 per cent after climbing 2.3 per cent in Q2.
“A correction is not expected given still-low unemployment rate, resilient household balance sheets, and low unsold inventory,” said CBRE’s Song.
“With a more favourable interest rate outlook now emerging, and several new project launches expected in the coming months, market activity could see renewed momentum moving forward,” said SRI’s head of research and data analytics, Mohan Sandrasegeran.
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