Transaction volume moderated further in 1Q 2024 amid the festivities, economic uncertainty and elevated interest rates. Despite this, the all-residential property price index recorded a moderate uptick.
Buyers are more cautious when committing to home purchases due to a combination of factors. These factors include looming economic uncertainty, rising retrenchment numbers, and elevated interest rates. Furthermore, buyers are taking more time to decide on a purchase with the increased housing options, stemming from more new homes being launched and a rise in resale listings due to recent home completions. Others are deferring their home purchases, hoping for better deals if interest rate cuts materialise in the 2H 2024.
Strong new sale performances, as seen at Lentor Mansion and the brisk sales of the remaining units at Cuscaden Reserve, underscore buyers’ interest in the new homes segment. But homebuyers have more considerations today beyond just location. New homes that fall within the $2-$2.5 mil price quantum or have considered functionality and sustainability needs will continue to appeal to majority of the buyers today.
OCR and RCR continue to see marginal price growth led by new home completions which helped uplifted resale prices in the regions.
We foresee a resurgence in buyers’ interest with several highly anticipated new home launches scheduled over the next few months. The forecasted interest rate cuts could also help boost buyer interest in the second half of 2024.
Residential Home Prices
Based on flash estimates, the All-residential property price index reported a modest quarter-on-quarter (q-o-q) increase of 1.5% in 1Q 2024.
Prices of non-landed properties increased by 1.0% in 1Q 2024, compared to the 2.3% increase in the previous quarter. Prices of non-landed properties in the Outside Central Region (OCR) and the Rest of Central Region (RCR) increased moderately by 0.4% and 0.2% q-o-q. By contrast, prices of non-landed properties in the Core Central Region (CCR) rose by 3.1% q-o-q.
Prices of landed properties rose 1.5% q-o-q at a slower pace compared to the 2.8% q-o-q growth in 4Q 2023.
Chart 1: Residential Price Indices
Source: URA, ERA Research and Market Intelligence, *Based on flash estimates
Property Transaction Volume
Sale transaction volume fell by about 20% q-o-q and by about 16% y-o-y in 1Q 2024.
Chart 2: Property Transaction Volume
Source: URA, ERA Research and Market Intelligence, *Based on flash estimates