Buyers on the Sidelines, Transactions Slow: Why Are Property Prices Still Rising? Unpacking the Reasons

Transactions cool while prices rise — amid tariff headwinds and a wait-and-see market stance, Singapore's private home market continues to demonstrate price resilience.

According to a market research report released in Singapore in May, Singapore's private residential property prices continued to climb despite uncertainties cast over the broader economic environment by the latest round of US tariffs. Against this backdrop, more prospective buyers may adopt a wait-and-see approach and defer their purchase decisions, exerting some pressure on upcoming sales performance.

As trade tariffs heighten market volatility, buyers are inclined to "wait and watch", which could lead to a near-term slowdown in new private home sales.

Signs of cooling sales emerge; PRs sole buyer group to register growth

Data shows that even before the tariff announcements, momentum in private home sales had already begun to ease. Following a strong rebound in project launches in Q4 2024, new launches in Q1 2025 slipped 8.4% quarter-on-quarter (QoQ), with new home sales dipping slightly by 1.3% accordingly.

Meanwhile, the resale market contracted for the second consecutive quarter, falling by another 3.2% this quarter. The dual decline in both new and resale transactions led to the first QoQ drop in overall non-landed private residential sales volume after three straight quarters of growth.

Notably, among all buyer profiles in Q1, only Permanent Residents (PRs) saw an increase in transaction volume, rising 2.1% QoQ to 931 units for the second consecutive quarter of gains. In contrast, purchases by Singapore Citizens fell 2.6% to 5,699 units, snapping a four-quarter growth streak. Purchases by foreign buyers tumbled 17.6% QoQ to just 70 units.

Prices continue upward climb; HDB upgrader demand serves as key pillar

Despite softer sales volumes, prices remained largely unaffected. Private home prices still rose 0.8% in Q1 2025, and while lower than the 2.3% gain in the previous quarter, it nevertheless reflected resilient property values.

Analysts note that key price supports include the wealth reserves of baby boomers forming an "implicit floor" in the market, as well as a buoyant HDB resale market, which empowers flat owners to upgrade to private properties and narrows the price gap between private homes and HDB flats.

Even with a slight moderation in sales, price trends are expected to maintain an upward trajectory as long as the market faces no major disruptions or fresh rounds of government cooling measures.

Upcoming launches set to benchmark regional prices; full-year forecast holds at 7% growth

Looking ahead, several upcoming project launches are expected to be major catalysts for price growth in 2025. These include:

• Core Central Region (CCR):

• River Green (525 units)
  Promenade Peak (596 units)
  W Residences Marina View (683 units)

• Rest of Central Region (RCR):

• One Marina Gardens (937 units)

• Outside Central Region (OCR):

• Springleaf Residence (941 units)
  

Most of these developments are landmark projects boasting prime locations and comprehensive master planning. They are expected to set new benchmark prices in their respective sub-markets, steering overall market prices higher.

The full-year forecast for private residential price growth remains unchanged, with prices projected to rise by 7% across 2025.