Public and private property price growth shows signs of moderation in Q1

SINGAPORE – Prices of resale Housing Board flats and private homes grew at a slower pace in the first quarter of 2025, according to flash estimates released by the authorities on April 1, in what could be early signs that property prices are moderating.

Minister for National Development Desmond Lee attributed the slower price growth to an increase in housing supply in both the public and private markets, and a drop in overall private home transaction volumes.

Flash estimates show that the HDB resale price index (RPI) grew by 1.5 per cent in the first quarter of 2025,

down from 2.6 per cent in the fourth quarter of 2024.

It is the lowest growth in the past five quarters.

The RPI has risen for 20 consecutive quarters, but the pace of growth has slowed in the last six months. Analysts cited a 7.7 per cent drop in resale volume in the first quarter of 2025 from a year ago.

HDB resale price growth in the first three months of this year was below the 1.8 per cent gain recorded in the same period in 2024.

In a Facebook post on April 1, Mr Lee attributed the slower price growth to the sustained supply of Build-To-Order (BTO) flats, and the largest-ever Sale of Balance Flats (SBF) exercise in February.

On the private housing front, flash estimates for the private residential price index showed a smaller increase of 0.6 per cent in the first quarter of 2025 compared with a

2.3 per cent increase in the preceding three months,

as the price momentum for non-landed properties eased across all market segments.

The total sale transaction volume also dropped by 15 per cent on a quarter-on-quarter basis, Mr Lee added.

He said the authorities would keep up the “strong supply of housing”, pointing out that more than 50,000 BTO flats will be launched over the next three years.

These will include 12,000 units with shorter waiting times of two-plus years. Around 8,500 balance flats in varying stages of completion will also be released for sale in 2025.

Although price growth has slowed, Mr Lee said there is still some “supply tightness” as fewer resale flats reached the minimum occupation period (MOP) in recent years, due partly to Covid-19 construction delays.

“However, the number of new flats reaching MOP will increase significantly, from 8,000 this year to 13,500 next year, (and) to 19,500 flats in 2028. This means that more resale flats are entering the market soon, and the supply tightness will ease,” he said.

Analysts said the slower HDB resale price growth indicated that some level of resistance is starting to set in against further price hikes.

Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, said price growth slowed across most flat types.

She pointed out that four-room flats posted a 1.9 per cent gain in the first quarter, down from 2.2 per cent growth in the previous quarter; while five-room flats saw a 2.1 per cent rise, down from a 2.7 per cent increase over the same period.

Amid growing macroeconomic uncertainty, the HDB resale market is expected to stay resilient, fuelled by upgraders within this segment and private home owners downsizing to resale flats, she said.

Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc, said launching more BTO flats with shorter waiting times will play a crucial role in easing demand pressures.

“These projects provide an attractive alternative for buyers who urgently need a home but are open to waiting a shorter period rather than turning to the resale market, he said.

On the private housing front, Mr Lee said overall private housing supply has been progressively ramped up through the Government Land Sales programme.

For the first half of 2025, private housing supply has increased to around 8,500 units, with 5,000 units to be released under the confirmed list. This is almost 60 per cent higher than the average confirmed list supply from 2021 to 2023.

Mr Lee said the authorities would keep up the confirmed list supply in the second half of 2025, and this would also include releasing more executive condominium (EC) units.

Close to 1,000 EC units will be launched under the confirmed list in the first half of 2025 and another 1,000 will be released in the second half of the year.

“This brings the total EC supply to 2,000 units for the whole of 2025 – the highest EC supply in recent years, almost double the average yearly supply launched from 2021 to 2023,” Mr Lee added.

JLL’s head of residential research Chia Siew Chuin noted that private home buyers are turning cautious despite improved sentiment since the fourth quarter of 2024, when interest rates moderated and the economic outlook was positive.

The projected slowdown in Singapore’s 2025 gross domestic product growth, which is affected by global trade tensions, geopolitical issues and economic policy uncertainties, may moderate the property market’s momentum.

Buying appetite has picked up since the fourth quarter of 2024, anchored by attractive suburban and city fringe projects at reasonable price quantums, Ms Tricia Song, CBRE head of research for South-east Asia, said.

“While the first quarter’s new sales have held up, most new launches for the rest of 2025 will be in the prime district, which have higher price points and may not generate similar volumes,” she said.

“With most pent-up demand in the suburbs and city fringe realised, pricing and design will be crucial for the upcoming new launches to sustain the momentum.”