Non-landed private home resale prices dip slightly in March, Central Region down 0.4% MoM

Weighed down by high interest rates and subdued market sentiment, overall non-landed private residential resale prices halted a three-month streak of gains in March, edging down 0.1% month-on-month (MoM).

Flash estimates from the March NUS Singapore Residential Price Index (NUS SRPI) revealed that overall resale prices for non-landed private homes dipped MoM, but still climbed 3.5% year-on-year (YoY). Over the first quarter of the year, overall non-landed private home resale prices rose by 0.3%.

Excluding small units, non-landed private resale prices in the Central Region fell 0.4% MoM in March, whilst prices in the Non-Central Region held flat compared to February. Small units (measuring 506 sq ft or below) slipped by a marginal 0.1% MoM.

The NUS SRPI tracks a basket of transaction data representative of completed non-landed private homes to reflect price trends across the local market. Following an update earlier this month, the index basket now includes non-landed private properties completed up to September 2023.

Analysis: High Interest Rates and Subdued Economic Backdrop Cap Buyers' Willingness to Pay Higher Prices

The primary driver behind March's dip in resale prices was likely elevated interest rates and a softer economic backdrop, which constrained buyers' willingness to stretch their budgets.

First-quarter real estate statistics recently released by the Urban Redevelopment Authority (URA) similarly reflected a moderation in private home price growth, with non-landed private property prices rising 1.0% quarter-on-quarter (QoQ), down from 2.3% in the preceding quarter.

Nevertheless, marginal price softenings could stimulate greater buyer interest. For example, while the price index for non-landed private homes in the Central Region eased 0.4% in March, transaction volumes rose 5.4% MoM. Furthermore, the number of private homes purchased by foreign buyers in March also saw an uptick compared to February.

The marginal 0.1% overall decline indicates that resale prices remained largely stable in March. Supported by the wide price gap between new launches and resale condominiums, demand in the resale market remains robust.

With fewer condominiums slated for completion or obtaining their Temporary Occupation Permit (TOP) this year, resale prices are expected to hold firm. In light of an anticipated tightening in housing supply, any overall decline remains unlikely despite potential price corrections in select sub-markets.

The Institute of Real Estate and Urban Studies (IREUS) at the National University of Singapore also revised February's private resale figures, showing that overall non-landed private resale prices inched up 0.1% MoM. Excluding small units, Central Region private home prices fell 0.2% MoM in February, while Non-Central Region prices rose 0.3%. Small units dipped 0.1% MoM.