Commentary on URA Q4 2024 statistics - Office, Retail, and Residential

By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

Office

According to URA, the office rental market in Singapore saw a second consecutive quarter of decline in Q4 2024, following a strong rebound in Q2 2024. The URA office rental index (Central Region) decreased by 0.9% q-o-q this quarter, after a marginal 0.5% decline in Q3 2024. This trend reflects a period of adjustment and stabilisation in the office market.

For the whole of 2024, rentals of office space remained flat, compared with the increase of 13.1% y-o-y in 2023. Similar to data from CBRE Research, the office market experienced modest rental growth in 2024, as leasing sentiment has been dampened by high fit-out costs, workplace transformations, and ongoing hybrid work arrangements. For most of the year, the market also faced a supply overhang, particularly due to the completion of IOI Central Boulevard Towers, which added 1.2 million sq. ft. of prime office space in the CBD.

That said, flight to quality has resulted in a notable improvement in vacancy rates for premium spaces in the CBD. Vacancies for prime CBD office space, particularly Category 1 office buildings, inched down to 9.1% in Q4 2024, from 10.3% in the previous quarter. As a result, median rents, based on contracts signed, increased by a significant 3.0% quarter-on-quarter in Q4 2024. This trend of prioritising high-quality office spaces will continue to be a key focus in 2025, as occupiers emphasise talent attraction and retention.

Demand across all sectors was relatively lean in 2024, with small to medium-sized firms accounting for the bulk of leasing transactions. That said, activity was active among the banking & finance, tech, insurance, and legal sectors, who have been relocating to high quality buildings in prime city centre locations.  

Table 1: Median rentals based on contract date

	Category 11			Category 22
	Rents ($ psf/month)	Q-o-q	Vacancy	Rents ($ psf/month)	Q-o-q	Vacancy
Q4 2023	$11.52	2.7%	7.5%	$6.04	2.2%	11.0%
Q1 2024	$11.37	-1.3%	7.9%	$6.08	0.7%	10.3%
Q2 2024	$11.83	4.0%	10.1%	$6.44	5.9%	11.1%
Q3 2024	$11.73	-0.8%	10.3%	$6.21	-3.6%	11.3%
Q4 2024	$12.08	3.0%	9.1%	$6.29	1.3%	11.3%

¹ Refers to office space in buildings located in core business areas in Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area.
² Refers to the remaining office space in Singapore which are not included in “Category 1”
Source: URA

According to the latest data from URA, the net supply of office space islandwide declined by 0.06 mil sq. ft. in Q4 2024, as there were no major completions this quarter. Net absorption for the quarter was 0.25 mil sq. ft., likely attributable to the physical occupancy of new buildings completed earlier in the year, such as IOI Central Boulevard Towers and Labrador Tower. As a result, islandwide vacancy decreased to 10.6% as at the end of 2024, from 11.0% in Q3 2024.

For the entire year, net absorption totalled 0.12 million sq. ft., compared to 0.89 million sq. ft. in 2023. The low net absorption figures were likely due to the removal of certain buildings, including the Singtel Comcentre development, Central Square, and Central Mall.

Outlook 

With IOI Central Boulevard Towers being the latest development and no significant new supply expected in the prime Grade A Core CBD area for the next three years, vacancy in this submarket ought to remain tight as the overhang of space is largely being absorbed. This could imply limited options for occupiers keen to expand or move into this segment. The overall improvement in take-up and occupancy in Q4 2024 bodes well, but upcoming lease expiries and low precommitment levels for new offices are still potential concerns in 2025.

On the demand side, a slower GDP growth, global economic uncertainties, elevated fit-out costs, and interest costs could hold back expansionary demand. Businesses might lean towards renewing leases, rather than relocate or expand, while seeking more flexibility in their leasing options. On balance, CBRE Research expects prime CBD rents to grow modestly, at around 2% in 2025, supported by limited medium-term supply and continued flight to quality.

Retail

Retail indicators such as the retail sales index declined in Q4 2024, as consumer sentiment remained cautious amid the sluggish economic environment. Retail sales (excluding motor vehicles, in chained volume terms) for Oct and Nov 2024 declined by 1.4% and 2.7% y-o-y respectively. Nevertheless, tourism visitor arrivals continued to recover by 17% and 12% y-o-y in Oct and Nov 2024 respectively, bringing Nov-to-date arrivals to 15.1 mil, which hit STB’s full year forecast of 15 – 16.5 mil visitors. 

URA’s Q4 2024 data showed that rents of retail space in the Central Region rose 0.6% q-o-q, extending the increase of 0.3% q-o-q the previous quarter. This brought full year 2024 growth to 0.5%, a tad faster than the 0.4% y-o-y increase in 2023. Similarly, CBRE Research observed healthy appetite for spaces by retailers in Q4 2024. Therefore, islandwide prime floor rents increased by 0.7% q-o-q, extending the rise of 0.7% q-o-q the previous quarter. This brought full year prime rent growth to 3.6%, easing from the 4.2% y-o-y increase in 2023.

Retailers remained optimistic about tourism recovery and the year-end festive season. According to URA data, Q4 2024 saw strong positive net absorption in the islandwide private retail market. Net demand for space stood at 37,000 sq. m. (about 398,000 sq. ft.), extending the positive net absorption of 12,000 sq. m. (about 129,000 sq. ft.) in Q3 2024, and bringing full year net absorption to 90,000 sq. m. (about 969,000 sq. ft.). This was the highest full year net absorption since 2019’s similar net absorption of 90,000 sq.m. (about 969,000 sq. ft.). As a result, islandwide private retail vacancy rates fell from 6.4% in Q3 2024 to 6.0% in Q4 2024, the lowest vacancy rate since Q4 2013.

All submarkets experienced positive net absorption in Q4 2024, with the exception of the Fringe area which saw no net absorption. With a net increase in stock of 7,000 sq. m. (about 75,000 sq. ft.), likely from projects that completed during the quarter including The Linq and Raffles Sentosa Singapore, the submarket saw a rise in vacancy rates from 7.1% in Q3 2024 to 7.6% in Q4 2024. 

The Downtown Core submarket outperformed in the quarter, registering positive net absorption of 16,000 sq. m. (about 172,000 sq. ft.) and reversing the negative net absorption of 1,000 sq. m. (about 11,000 sq. ft.) in Q3 2024. This could be attributed to new projects such as Kada at Maxwell which has seen a healthy take-up of its retail spaces. Normalisation of work-from-office arrangements, coupled with tourism recovery could have boosted retailers’ confidence in the area. As a result, vacancy rates fell from 7.5% in Q3 2024 to 5.6% in Q4 2024, the lowest vacancy rate since Q4 2013.

The outside central region (OCR) submarket also outperformed in Q4 2024, posting positive net absorption of 12,000 sq. m. (about 129,000 sq. ft.), extending the positive net absorption of 6,000 sq. m. (about 65,000 sq. ft.) the previous quarter. Hence, vacancy rates fell from 4.0% in Q3 2024 to 3.6% in the quarter, which is also the lowest vacancy rate since Q4 2013. Retailers continue to drive demand for spaces in the OCR submarket on the back of its resilient local catchment. 

Landlords have sustained a rise in prime floor rents amid strong demand for retail spaces in Q4 2024. Anecdotally, CBRE Research noted that F&B operators actively expanded their footprint, although the fine dining scene continued to witness closures such as Sushi Kimura, Voyage, and Chef Kang’s. Meanwhile, fashion and sports brands, including Burberry, Tom Ford, Li-Ning, and Decathlon, increased their presence during the quarter.

The rise in rents, coupled with expectations of continued rental growth alongside tourism recovery, as well as falling interest rates have bolstered investor confidence in retail assets. URA’s price index showed that prices for the central region rose 1.0% y-o-y in 2024, extending the rise of 1.2% y-o-y in 2023.

Outlook

While retailers face challenges such as manpower shortages, competition from e-commerce, and higher operating costs, Singapore remains an attractive market for many global brands due to its reputation as a business and entertainment hub. Tourism recovery underpinned by the strong pipeline of MICE events and concerts should support demand for prime retail spaces. Coupled with below-historical-average supply over the next few years, CBRE Research expects overall prime retail rents to recover to pre-pandemic levels in 2025. 

Residential

In Q4 2024, private housing prices rebounded following Q3 2024’s 0.7% q-o-q decline, rising 2.3% q-o-q on the back of strong sales and benchmark prices set at a slew of new launches in the quarter amid lower interest rates. This brought 2024 full-year price growth to 3.9%, a moderation from 2023’s 6.8%.

The quarter’s rebound was driven by non-landed properties which posted an increase of 3.0% q-o-q after Q3 2024’s marginal 0.1% q-o-q rise. Prices in the landed segment stabilised, falling marginally by 0.1%, compared to the 0.9% q-o-q correction recorded by flash estimates. This follows a 3.4% q-o-q decline in Q3 2024. Full year non-landed prices rose 4.7% vs landed property price increase of 0.9%, easing from 8.0% and 6.6% price growth in 2023 respectively.   

With a surprise turnaround in sales volumes in non-landed segment in Q4 2024, prices also outperformed. OCR and RCR non-landed segments which saw the bulk of new project launches in Q4 2024 led with price increases of 3.3% and 3.0% q-o-q respectively. RCR’s boost was driven by the success of new launches Meyer Blue, Emerald of Katong, Union Square Residences, Nava Grove which permeated into higher sales for earlier comparable launches such as The Continuum, Tembusu Grand and Pinetree Hill. OCR’s improvement came on the back of successful launches of Norwood Grand and Chuan Park. 

CCR which saw only 1 new launch, The Collective at One Sophia also improved 2.6% in Q4 2024, after declining 1.1% in Q3 2024, as some CCR projects cleared their unsold inventory after offering discounts in earlier 2024 such as Cuscaden Reserve and Klimt at Cairnhill.

Overall, prices in the CCR, RCR and OCR grew 4.5%, 5.8% and 3.7% respectively for the whole of 2024. CCR and RCR prices outperformed 2023 full-year growth of 1.9% and 3.1% respectively, while OCR price growth slowed from 2023’s blistering 13.7% increase. 

Private residential prices rose 3.9% in 2024, moderating from 6.8% growth in 2023. Moving forward, home prices are likely to continue rising in 2025 supported by strong household balance sheets, lower interest rates, and potential benchmark pricing at new launches. Barring an economic recession, interest rate hikes or additional cooling measures, CBRE Research forecasts a moderate price increase of 3 – 6% in 2025.

The rental index of private residential properties was flat in Q4 2024 after Q3 2024’s rebound. URA’s islandwide rental index was unchanged after rising 0.8% q-o-q in Q3 2024. Non-landed properties outperformed in Q4 2024, posting a 0.2% q-o-q increase but this was offset by a 1.8% q-o-q decline in landed property rents. For the whole of 2024, landed property rents were down 3.8% while non-landed rents were down 1.7%. 

Overall rents were down 1.9% in 2024, marking the first full year of rent decline since 2020’s -0.6% and the largest decline since 2017’s -1.9%.  The 2024 decline followed the 8.7% rise in 2023, +29.7% in 2022 and +9.9% in 2021. 

That said, vacancy has fluctuated through 2024 though it is firmly down from peak vacancy of 8.4% in Q3 2023 as completions taper off in 2024. As a result, the rental market is showing signs of stabilisation. Coupled with below-trend supply of 5,846 units in 2025, we forecast islandwide rents to recover and grow 1 – 3% in 2025 barring a significant pullback in demand.

After sinking to record lows in the first nine months of 2024, private residential developer sales saw a robust recovery in Q4 on strong pent-up demand, wealth effect from the recovering stock markets, and lower interest rates on a series of Fed rate cuts since Sep 2024. Q4 2024 developer sales jumped three-fold to 3,420 units from 1,160 units in Q3 2024 and exceeded the 3,049 units sold in the first nine months of 2024. Q4 2024’s sales took the tally of new homes sold for the whole of 2024 to 6,469 units, up 0.7% y-o-y from 2023’s 6,421 units which was a 15-year low for developer sales since 4,264 units were sold in 2008 during the Global Financial Crisis.

Looking ahead to 2025, buying sentiment and appetite has improved amid lower mortgage rates and developers will be more likely to push ahead with launches. An estimated 12,000 – 14,000 new units could potentially be launched in 2025, nearly double the 6,647 units in 2024. CBRE Research expects 7,000 – 8,000 new homes to be sold in 2025 on easing interest rates, better buying sentiment, and an attractive pipeline of launches. This represents an improvement from 2024’s 6,560 units but remains below the 5-year average (2020 – 2024) of 8,618 units. Buyers may remain price-sensitive and selective in 2025 due to the myriad of new launch options. Selected projects with unique propositions, superior locational attributes near good schools and key transport nodes are expected to outperform. Attractive developer pricing remains crucial for successful launches.

Private home prices rose 2.3% q-o-q in Q4 2024, similar to the initial flash estimate and reversing the 0.7% q-o-q decline in Q3 2024. With this, prices rose 3.9% in 2024 and are up 37.7% since the COVID-19 trough in Q1 2020. Q4 2024’s price rebound was driven by non-landed properties which posted an increase of 3.0% q-o-q after Q3 2024’s marginal 0.1% q-o-q rise. Prices in the landed segment stabilised, falling marginally by 0.1%, compared to the 0.9% q-o-q correction recorded by flash estimates. This follows a 3.4% q-o-q decline in Q3 2024. Full year non-landed prices rose 4.7% vs landed property price increase of 0.9%, easing from 8.0% and 6.6% price growth in 2023 respectively.   
• Price growth was consistent across non-landed segments, led by OCR and RCR non-landed segments which saw the bulk of new project launches in Q4 2024 led and price increases of 3.3% and 3.0% q-o-q respectively. The RCR’s boost was driven by the success of new launches Meyer Blue, Emerald of Katong, Union Square Residences, and Nava Grove which permeated into higher sales for earlier comparable launches such as The Continuum, Tembusu Grand, and Pinetree Hill. OCR’s improvement came on the back of successful launches of Norwood Grand and Chuan Park. 
• CCR which saw only 1 new launch, The Collective at One Sophia also improved 2.6% in Q4 2024, after declining 1.1% in Q3 2024, as some CCR projects cleared their unsold inventory after offering discounts in earlier 2024 such as Cuscaden Reserve and Klimt at Cairnhill.
• Overall, prices in the CCR, RCR and OCR grew 4.5%, 5.8% and 3.7% respectively for the whole of 2024. CCR and RCR prices outperformed 2023 full-year growth of 1.9% and 3.1% respectively while OCR price growth slowed from 2023’s blistering 13.7% increase.

Table 2: Top 10 best-selling new developer sales projects (excluding ECs) in 2024 (ranked in descending order by number of units sold in the year)

Project name	Tenure	Market segment	Units sold	Median Price ($psf)	% Of project sold to date*
EMERALD OF KATONG	99 yrs	RCR	840	$2,627	99%
CHUAN PARK	99 yrs	OCR	720	$2,587	79%
LENTOR MANSION	99 yrs	OCR	492	$2,266	92%
NAVA GROVE	99 yrs	RCR	387	$2,445	70%
NORWOOD GRAND	99 yrs	OCR	291	$2,081	84%
HILLHAVEN	99 yrs	OCR	265	$2,096	78%
THE CONTINUUM	Freehold	RCR	235	$2,869	66%
HILLOCK GREEN	99 yrs	OCR	223	$2,209	77%
TEMBUSU GRAND	99 yrs	RCR	205	$2,424	91%
PINETREE HILL	99 yrs	RCR	196	$2,512	70%

Source: URA, CBRE Research 
*Sales status based on caveats from Realis as of 24 Jan 2025.

New home sales rebounded strongly in Q4 2024 on the back of strong pent-up demand, attractively-priced new launches, and lower interest rates. 3,420 new homes were sold in the quarter, up 194.8% q-o-q from 1,160 units in Q3 2024 and 213.2% y-o-y from Q4 2023’s 1,060 units. There were 7 major launches in the quarter. The best-performing projects were Emerald of Katong (846 units), Norwood Grand (348 units), Chuan Park (916 units), and Nava Grove (552 units), with robust launch weekend take-up rates of 99%, 84%, 76%, and 65% respectively. For the whole of 2024, new home sales amounted to 6,469 units, marginally higher than 2023’s 6,421 units.

Resale transaction volumes in Q4 2024 fell slightly by 4.1% q-o-q to 3,702 units, after 3,860 units in Q3 2024. Resale transactions made up 49.8% of total transactions in Q4 2024, a significantly lower proportion than 71.9% in Q3 2024 as buyers gravitated to the host of attractive new launches in the quarter. Overall resale transactions in 2024 amounted to 14,053 units, up 24% from 2023’s 11,329 units as price-conscious buyers turned to secondary stock in the first nine months of 2024 prior to the robust rebound in developer sales given elevated interest rates and the wide price gap between primary and secondary stock.

Alongside the uptick in new sales, unsold inventory of uncompleted private residential units (excluding ECs) fell 2.7% q-o-q in Q4 2024 to 19,405 units from 19,940 units in Q3 2024. Including completed units, unsold inventory decreased 5.5% from 20,122 units in Q3 2024 to 19,606 units in Q4 2024. 
• Unsold inventory is still significantly lower than the last peak of 37,799 units recorded in Q1 2019. At 19,606 units, this implies more than two years’ of landbank based on the 5-year annual average new home sales (2020 – 2024) of 8,600 units but equalizes to 3 years’ of landbank based on 2024’s total developer sales of 6,469 units.

Rentals of private residential properties was flat in Q4 2024 after Q3 2024’s rebound. URA’s islandwide rental index was unchanged after rising 0.8% q-o-q in Q3 2024. This means full year rents were down 1.9%, marking the first full year of decline since 2020.  Rents are still up 52.1% since bottom in Q3 2020.
• Non-landed properties outperformed in Q4 2024, posting a 0.2% q-o-q increase but this was offset by a 1.8% q-o-q decline in landed property rents. For the whole of 2024, landed property rents were down 3.8% while non-landed rents were down 1.7%.
• Among non-landed properties, the increase was supported by the CCR and RCR which posted 0.9% and 0.3% q-o-q growth respectively while the OCR underperformed, falling 1.3% q-o-q. This brought full-year 2024 rental growth in the CCR, RCR and OCR to -2.4%, -1.3% and -1.3% respectively.
• 8,460 private homes (excluding ECs) were completed in 2024, down from 19,968 units in 2023. In Q4 2024, 3,084 private residential units were completed -- including KI Residences At Brookvale (660 units), Penrose (566 units), Irwell Hill Residences (540 units) and The Watergardens At Canberra (448 units). This was 5.2% less than Q3 2024’s 3,084 units. Looking ahead, 5,846 units are expected to be completed in 2025. 
• Despite the moderate number of new completions in Q4 2024, the stock of occupied private residential units (excluding ECs) increased by 5,420 units in the quarter, compared with a decrease of 2,051 units in the previous quarter. As a result, the vacancy rate of completed private residential units (excluding ECs) decreased to 6.6% as at end of Q4 2024, from 7.2% in the previous quarter. This could be a sign that rental market conditions are stabilising.    
• Vacancy rates of completed private residential properties as at the end of Q4 2024 in CCR, RCR and OCR were 10%, 7.3% and 4.7% respectively, compared with 11.2%, 8.1% and 4.9% in the previous quarter and 9.8%, 8.1% and 7.4% in 2023.

Outlook

After sinking to record lows in the first nine months of 2024, private residential developer sales saw a robust recovery in Q4 2024, taking the tally of new home sales for 2024 to 6,469 units, up 0.7% y-o-y from 2023’s 6,421 units which was a 15-year low for developer sales since 4,264 units were sold in 2008 during the Global Financial Crisis. Looking ahead to 2025, buying sentiment and appetite has improved amid lower mortgage rates and developers will be more likely to push ahead with launches. An estimated 12,000 – 14,000 new units could potentially be launched in 2025, nearly double the 6,647 units in 2024. CBRE Research expects 7,000 – 8,000 new homes to be sold in 2025 on easing interest rates, better buying sentiment and an attractive pipeline of launches. This represents an improvement from 2024’s 6,469 units but remains below the 5-year average (2020 – 2024) of 8,600 units. Buyers may remain selective in 2025 due to the myriad of new launch options. Selected projects with unique propositions, superior locational attributes near good schools and key transport nodes are expected to outperform. Attractive developer pricing remains crucial for successful launches.

Rents fell 1.9% in 2024, compared to an 8.7% increase in 2023. After three consecutive quarters of decline culminating to a 9% correction from Q3 2023 – Q2 2024, rents rebounded in Q3 2024 and stabilised in Q4 2024. Moving forward, rents could have bottomed out in the near term. Coupled with below-trend supply of 5,348 units in 2025, we forecast islandwide rents to recover and grow 1 – 3% in 2025 barring a significant pullback in demand.

Private residential prices rose 3.9% in 2024, moderating from 6.8% growth in 2023.  Home prices are likely to continue rising in 2025 supported by strong household balance sheets, lower interest rates, and potential benchmark pricing at new launches. Barring an economic recession, interest rate hikes or additional cooling measures, CBRE Research forecasts a moderate price increase of 3 – 6% in 2025.

Read the URA press release here.