Private Residential Resale Prices Hold Steady in Q3 2024

Despite the prevailing high-interest-rate environment, private resale home prices held steady in the third quarter of 2024.

From 2Q2024 to 3Q2024, the average resale price of landed and non-landed private homes (excluding executive condominiums, or ECs) remained unchanged at $1,713 psf.

However, average resale prices across the Core Central Region (CCR), Rest of Central Region (RCR), and Outside Central Region (OCR) experienced some fluctuations.

The average resale price in the CCR rose 1.6% from $2,145 psf in 2Q2024 to $2,181 psf in 3Q2024. This partially reversed the 3.6% quarter-on-quarter (QoQ) price decline recorded between 1Q2024 and 2Q2024.

Over the same period, prices in the RCR also inched up by 1.4%, rising from $1,837 psf to $1,863 psf. This was a moderation compared to the 3.1% QoQ price growth seen in the previous quarter.

Conversely, the average resale price of private homes in the OCR slipped 0.4% in 3Q2024, easing from $1,495 psf to $1,489 psf—marking a reversal from the 3.5% growth recorded in 2Q2024.

Robust demand for resale homes

In terms of sales volume, URA data showed that 3,860 resale homes were transacted last quarter, up 1.5% from the 3,802 units sold in 2Q2024.

Resale transactions accounted for 71.9% of the total 5,372 private home sales (including new sales, subsales, and resale transactions) in 3Q2024. According to OrangeTee data, this was a slight dip from the peak market share of 77.4% recorded in 2Q2024.

In the first nine months of the year, a total of 10,351 resale homes were transacted, representing a 21.8% year-on-year increase compared to the 8,498 units sold over the same period in 2023.

The market share of resale homes also saw a similar uptick, expanding from 57.8% of total residential transactions in the first three quarters of 2023 to 71.3% over the same period this year.

The report noted that the strong demand for resale homes could be attributed to a significant increase in housing supply. Over the past two years, nearly 30,000 private residential units were completed, broadening the range of options available to prospective buyers.

Furthermore, as new private home prices remain elevated, buyers are likely turning to the secondary market in search of more affordable private housing options.

For instance, Norwood Grand, a recently launched condominium in the OCR, has sold 293 units since its launch in October at an average price of $2,086 psf. This represents a 40% premium over the average OCR private resale price of $1,489 psf in 3Q2024. Similarly, Meyer Blue, a newly launched RCR project, moved 122 units in the same month at an average price of $3,252 psf—74.5% higher than the average price of RCR resale units.

Rate cuts to spur sales

The US Federal Reserve's recent interest rate cuts could stimulate luxury home sales on the back of lower borrowing costs. While high-net-worth investors tend to be less sensitive to interest rate fluctuations, falling rates could prompt more activity as investors look to capitalise on a favourable credit environment to expand their portfolios.

The report added that buyers who previously adopted a wait-and-see approach due to high interest rates may be more inclined to re-enter the market at this juncture.