Non-landed private home resale prices rise 0.8% month-on-month in September

Singapore's non-landed private residential resale prices rose by 0.8% month-on-month in September, gaining stronger momentum, although resale volume dipped by 5.3% compared to August. Analysts suggest that the launch of multiple new developments and buyers awaiting further interest rate cuts could have led to the decrease in transaction volume, with future rate cuts expected to drive a rebound in the resale market.

The modest uptick in non-landed private home resale prices could be attributed to buyers re-entering the market as they anticipate declining interest rates.

The drop in resale volume may be linked to the rollout of new projects, such as Norwood Grand. Additionally, the launch of popular prime location flats under the government's Build-To-Order (BTO) exercise has also impacted private residential resale volume.

The decrease in transaction volume could also stem from several new project launches slated between September and November, giving prospective buyers more options in the new private home market.

On the other hand, higher acquisition costs have prompted many sellers to raise their asking price expectations, widening the price gap between buyers and sellers and consequently slowing down transaction activity.

September Resale Volume Dips Month-on-Month but Jumps 35.8% Year-on-Year

With the US Federal Reserve entering a rate-cutting cycle, buyers without immediate housing needs may temporarily defer their purchases, waiting for further rate reductions before making a move.

Since the Federal Reserve announced its rate cut, the three-month Singapore Overnight Rate Average (SORA)—used by banks to price mortgage packages—has softened slightly. From an annual rate of 3.54% in mid-September, it slipped to 3.42% as of 24 October.

Reports show that while September's resale volume slipped month-on-month, it increased by 35.8% year-on-year, standing 4% higher than the five-year average transaction volume for the month of September. Resale prices, meanwhile, climbed by 4.4% year-on-year.

The resale segment has been a bright spot in the private residential market over recent months, and the outlook remains relatively upbeat. A substantial price gap between new launches and resale homes, prospects of further interest rate cuts, and overall improved market sentiment are expected to support the resale private home market in the coming months.

As the year-end approaches, resale volume may moderate further due to seasonal trends. Following the holiday period, resale activity is poised to rebound next year, especially should the Federal Reserve announce additional interest rate cuts.

Flash estimates indicate that September's private home resale price gain outperformed the 0.1% increase recorded in the previous month, marking the seventh consecutive month of growth since March this year. However, private home resale volume contracted for the second consecutive month, with a total of 1,026 private residential units transacted in September.

In terms of resale prices, the Core Central Region (CCR) and Outside Central Region (OCR) saw month-on-month increases of 0.2% and 1.2% respectively, while the Rest of Central Region (RCR) remained unchanged.