Private home prices up 2.3% in Q4, but overall growth slowed to 3.9% in 2024

SINGAPORE - Private residential property prices rose 2.3 per cent in the fourth quarter, due primarily to a last-minute surge in new home sales and wealth effect from recovering global stock markets, reversing a modest drop in the third quarter.

The latest data, from flash estimates released by the Urban Redevelopment Authority (URA) on Jan 2, follows a 0.7 per cent drop in the third quarter and a 0.9 per cent gain in the second quarter.

For 2024, the private residential price index still grew at a slower pace of 3.9 per cent, compared with a 6.8 per cent gain in 2023 and an 8.6 per cent jump in 2022. This is the slowest annual price growth recorded since 2020, when prices increased by just 2.2 per cent during the Covid-19 pandemic, suggesting buyer caution.

Overall, private property price growth tracked economic growth in 2024, with the fourth-quarter gross domestic product advance estimate registering a 4.3 per cent expansion year on year in the fourth quarter and taking full-year economic growth to 4 per cent, a pick-up from 1.1 per cent in 2023.

“With home prices still aligned with economic fundamentals, we believe it is premature for more cooling measures,” said Ms Tricia Song, CBRE’s research head for Singapore and South-east Asia.

PropNex chief executive Ismail Gafoor called the fourth quarter’s performance “impressive – one that single-handedly pulled up new private home sales in a year when sentiment had been relatively lacklustre”.

New home sales, excluding executive condominiums (ECs), jumped to 3,398 units in the fourth quarter, nearly triple the third quarter’s 1,160 units, and above the five-year quarterly average of 2,101 units, according to CBRE.

Six new projects – Chuan Park, Emerald of Katong, Nava Grove, The Collective at One Sophia, Union Square Residences and Novo Place EC – accounted for more than 82 per cent of total new home sales in November alone.

Following successive interest rate cuts in September, November and December, new home sales swelled in October and November, due to pent-up demand resulting from developers holding back new launches and higher interest rates earlier in 2024, said Knight Frank Singapore’s head of research Leonard Tay.

Collectively, new private home sales in October and November came in at 3,295 units, outperforming the 3,049 units sold in the first nine months of 2024.

But for the year up to mid-December, overall sales fell by about 14 per cent to 21,232 units, compared with the annual average of 24,830 units in 2021 to 2023, according to URA.

Buoying overall private residential prices were sharp gains in non-landed prices and a slower decline in landed prices.

Non-landed property prices jumped 3.2 per cent in the fourth quarter from a 0.1 per cent gain in the third quarter – the strongest quarterly growth in non-landed home prices since the third quarter of 2022 when prices climbed 4.4 per cent. Landed prices dipped just 0.9 per cent compared with a 3.4 per cent drop over the same period.

Prices of suburban non-landed properties gained 3.4 per cent in the fourth quarter, after holding steady at zero growth in the third quarter, due in part to Chuan Park – the new launch sold a total of 724 units as at Dec 22 at an overall average price of $2,587 per sq ft (psf), PropNex’s head of research Wong Siew Ying said.

But in 2024, suburban condo prices grew just 3.8 per cent, compared with 13.7 per cent in 2023. This could signal increasing buyer fatigue in a submarket that has seen substantial price growth in recent years, said Mr Wong Xian Yang, Cushman & Wakefield’s research head for Singapore and South-east Asia.

Similarly, the city fringe submarket jumped 3.4 per cent, from a 0.8 per cent rise in the third quarter, as new launch Emerald of Katong shifted a whopping 840 units at an average price of $2,637 psf as at Dec 22.

Three other new launches also performed strongly, with Meyer Blue selling 132 units at an average price of $3,243 psf, Union Square Residences moving 106 units at an average price of $3,166 psf, and Nava Grove selling 386 units at $2,452 psf.

These new launches were able to achieve higher prices due to their proximity to MRT stations and amenities, higher construction costs, and new guidelines on the harmonisation of strata and gross floor areas – where units are sold based on liveable space, Mr Gafoor said.

Prime district prices snapped two straight quarters of decline with a 2.4 per cent gain in the fourth quarter. This brings the cumulative price increase to 4.3 per cent in 2024 – eclipsing the 1.9 per cent growth in 2023 due to the 60 per cent additional buyer’s stamp duty rate for foreigners, PropNex said.

This recovery bodes well for upcoming new prime launches in 2025, noted Mr Nicholas Mak, chief research officer at property portal Mogul.sg

“About 20 residential projects could be launched this year, with half of these in the prime district. The steady property price growth and strong primary market sales in the fourth quarter” could push more developers to launch in 2025, he said.

But while take-up rates across new projects are expected to improve, Ms Song noted that buyers could remain selective in 2025 amid a myriad of new launch options.