Commentary on the flash estimate of Q3 2024 private residential property price index

URA’s flash estimate of the price index for private residential properties for Q3 2024 shows that Singapore’s private housing prices declined 1.1% q-o-q, breaking a streak of four consecutive increases, since prices last pulled back slightly by 0.2% q-o-q in Q2 2023. This is the first time prices have corrected by more than 1% since Q3 2016 which recorded a 1.5% q-o-q fall. Comparatively, the COVID-19 price decline in Q1 2020 was 1.0% q-o-q. 

This brings the year-to-date price increase to 1.1%, with the full year 2024 likely to see a marked slowdown from 2023’s 6.8%. This has come alongside tepid developer sales since the start of 2024 on weak economic conditions, buyer fatigue and increasing resistance to high price points. H1 2024 new sales volumes slumped to 1,889 units, the lowest half-year developer sales on record, even below the 1,977 units recorded in H2 2008 during the Global Financial Crisis (GFC). 

New home sales have remained in the doldrums in Q3 2024. Based on caveats downloaded from realis on 1 Oct 2024 (today), 1,054 new private homes (excluding ECs) were sold in Q3 2024. While up 45.4% q-o-q from Q2 2024’s low base of 725 units, this is about half of the 5-year quarterly average of 2,214 units.

Secondary sales volumes, however, continued to hold up in Q3 2024, an indication that there is still liquidity in the market but price-conscious buyers have turned to secondary stock amid the wide price gap between primary and secondary stock. Secondary sales transaction volumes in Q3 2024 (up to mid-Sep 2024) were at 3,293 units, on track to match Q2 2024’s 4,190 units and higher than the quarterly average of 3,156 units in the full year 2023. 

URA Q3 2024 flash
Flash estimates show that private home prices fell 1.1% q-o-q in Q3 2024, reversing the 0.9% q-o-q decrease in Q2 2024. With this, prices have increased 1.1% YTD, and are up 34.0% since the COVID-19 trough in Q1 2020. Q3 2024 private home price decline was led by landed properties which posted a decrease of 3.8% q-o-q after Q2 2024’s 1.9% q-o-q rise, while price growth in the non-landed segment was more stable, recording a 0.3% q-o-q decline from a 0.6% q-o-q growth in Q2 2024. 

The price performance across non-landed segments was mixed, weighed down mainly by the CCR which recorded the largest decline of 1.5% q-o-q, extending its 0.3% q-o-q fall in Q2 2024, probably due to discounts offered at CCR projects which still have unsold inventory and nearing completion or recently completed.  Comparatively, the OCR saw a marginal 0.1% q-o-q decline after flattish 0.2% growth in Q2 2024, while the RCR bucked the trend, rising slightly by 0.2% q-o-q. This brings year-to-date price growth in CCR, RCR and OCR to 1.5%, 2.1% and 0.3% respectively. 
     
Outlook
Based on caveats downloaded from realis on 1 Oct 2024 (today), 1,054 new private homes (excluding ECs) were sold in Q3 2024. While up 45.4% q-o-q from Q2 2024’s low base of 725 units, this is about half of the 5-year quarterly average of 2,214 units.

Q1 – 3 2024 developer sales currently stand at 2,943 units, 44.8% lower y-o-y from 5,329 units sold over the corresponding period in 2023. Buyers have turned more selective amid a myriad of new launch options, buyer fatigue and increasing resistance to high price points, with generally lower take-up rates across 2024 project launches. 

Looking ahead, recent interest rate cuts could catalyse a recovery in sentiment and sales in Q4 2024 amid a healthy pipeline of attractive new launches. A more significant rebound in new developer sales however is likely to occur only in 2025 when more clarity is reached on the global economic condition. 

CBRE Research expects 5,000 – 5,500 new homes to be sold in 2024. Attractive developer pricing remains key to healthy new launch performance.  

Private residential prices which are up 1.1% YTD should remain resilient in Q4 2024. CBRE Research keeps our full year forecast at +3% in 2024. A correction is not expected given still-low unemployment rate, resilient household balance sheets, and low unsold inventory.