Local private home market slows in Q1, prices up 1.4% q-o-q

Singapore's private residential property market saw price growth moderate in the first quarter, weighed down by the Chinese New Year festive lull and macroeconomic headwinds. Overall private home prices rose 1.4% quarter-on-quarter in Q1, marking the slowest pace of quarterly growth since Q3 2021.

Analysts believe that with more new private residential projects slated for launch, overall private home prices are poised for steady growth ahead.

According to full real estate statistics released by the Urban Redevelopment Authority (URA) on Friday (26 April), private home price growth eased to 1.4% in the first quarter, down from the 2.8% increase in the previous quarter.

Non-landed private home prices rose 1.0%, moderating from the 2.3% gain recorded in the preceding quarter.

By market segment, the Core Central Region (CCR), representing the luxury private housing market, posted the strongest gains, climbing 3.4% quarter-on-quarter, slightly below the 3.9% increase in the previous quarter.

Prices in the Rest of Central Region (RCR), representing mid-tier private homes, rebounded with a 0.3% rise in Q1, reversing a 0.8% decline in the prior quarter.

Meanwhile, prices in the Outside Central Region (OCR), representing mass-market private homes, inched up by 0.2%, slowing significantly from the 4.5% jump seen in the preceding quarter.

Supply remained ample, with developers launching 1,304 new private residential units in Q1, up from 1,060 units in the previous quarter.

In terms of transaction volume, developers sold 1,164 new private homes in Q1, representing a 6.6% increase quarter-on-quarter.

Market observers noted that Q1 is traditionally a seasonal lull for the property market, which was further compounded by the Chinese New Year holidays and cautious market sentiment that set in late last year, leading to more subdued price growth compared to Q4.

Analysts pointed out that resilient demand in the luxury resale segment helped drive the overall price increase in high-end private homes.

Despite the tightening of Additional Buyer’s Stamp Duty (ABSD) regulations on foreign buyers in April last year, high-end homes in Singapore continue to draw substantial interest from overseas purchasers. Foreign buyers accounted for 21.9% of luxury private home transactions in the first quarter.

The luxury private residential sector is projected to outperform both the mid-tier and mass-market segments this year.

Landed home price growth also cooled, softening from a 4.6% increase in Q4 last year to 2.6% in Q1.

Private Home Rents Drop for Second Consecutive Quarter

Overall private residential rents declined for the second consecutive quarter, falling 1.9%. Rents for non-landed and landed private homes dipped 1.6% and 4.2% respectively, extending the previous quarter's downtrend.

URA highlighted that geopolitical tensions could disrupt global demand and supply, adding uncertainty to the economic outlook. In addition, domestic mortgage interest rates are expected to stay elevated compared to the levels observed over the past decade.

URA advised buyers to exercise financial prudence, especially when committing to long-term mortgage loans.

More New Launches Ahead; Prices Poised to Keep Climbing

There is still upside potential for private home prices as more new developments hit the market this year, including approximately six to nine large-scale projects featuring over 500 units. New private home sales could surpass 1,000 units in certain months, with full-year price growth expected to hover between 3% and 6%.

Sustained demand for new launches, bolstered by strong sales momentum at Lentor Mansion and The Residences at W Singapore Sentosa Cove, will provide a solid foundation for the market—a welcoming sign for developers and property stakeholders alike.