Over 4,000 mass-market private homes to be launched, accounting for half of new supply at a seven-year high

More than 4,400 mass-market private residential units are expected to be launched this year, accounting for over half of the total new private home launches—the highest proportion since 2017. Analysts note that this will help satisfy pent-up demand and moderate price growth for new mass-market homes.

According to a recent report, 50.5% of new private homes launched this year belong to the mass-market segment in the Outside Central Region (OCR), up from 35.6% and 36.9% in the past two years respectively. The Rest of Central Region (RCR), representing mid-tier private homes, and the Core Central Region (CCR), representing prime luxury homes, account for 29.8% and 19.7% respectively.

These mass-market launches include several mega developments, such as Lentor Mansion (533 units) at Lentor Gardens and Sora (440 units) along Yuan Ching Road.

Mass-market private home prices surged 13.8% in 2023

The report highlighted that mass-market private home prices rose by 13.8% last year, the steepest annual increase since 2010. By comparison, price growth for mid-tier and luxury private homes was noticeably subdued, at just 2.7% and 2.1% respectively.

In the fourth quarter of last year, mass-market homes continued to lead price gains with a 4.6% increase. Luxury homes climbed 4.2%, while mid-tier homes fell by 1.2%.

Excluding Executive Condominiums (ECs), the average price per square foot (psf) for mass-market homes in Q4 rose by 6.5% quarter-on-quarter, compared to a 3.4% rise for luxury homes. In contrast, the average psf for mid-tier homes dropped by 9%.

Looking at new home sales alone, the average psf for mass-market units jumped 10.1% quarter-on-quarter in Q4, significantly outpacing luxury homes (up 5.7%) and mid-tier homes (down 1%).

Over 90% of new mass-market units transacted above $2,000 psf

A tight supply of mass-market private homes may have been the key driver behind the price surge. From 2019 to 2023, an average of approximately 3,495 mass-market units were launched each year, compared to an annual average of 9,860 units between 2009 and 2013. Consequently, psf prices for new mass-market homes have crossed the $2,000 benchmark.

Of the 639 new mass-market private home units sold in Q4 last year (excluding ECs), 91.4% commanded prices above $2,000 psf.

On the other hand, overall private home price growth moderated last year. According to the Urban Redevelopment Authority (URA) private residential property price index, overall prices rose by 6.7% last year, down from 8.6% in 2022 and 10.6% in 2021.