Has the Private Property Market in Singapore Hit a Turning Point?
In Q3 2024, private residential prices showed their first sign of a slowdown, with the URA private property price index slipping by 0.7%—a notable shift from the 0.9% increase in the previous quarter. This marks the first quarter-on-quarter decline since Q2 2023. But what does this really mean? Are we at the start of a broader downturn, or is the market simply stabilizing?
Figure 1: URA Residential Price Index
Source: URA
Are Prices About to Fall Further? Or Have They Hit a Plateau?
While the Q3 decline has raised eyebrows, several data points suggest that the market might level off rather than enter a sustained downcycle.
1. Segment-Specific Trends Tell a Different Story
If the market were correcting, we’d expect?consistent declines across all segments. However, in Q3 2024, the picture was more mixed. Landed property prices fell sharply by 3.4%, and non-landed homes in the Core Central Region (CCR) saw a modest 1.1% dip. Meanwhile, prices in the Rest of Central Region (RCR) and Outside Central Region (OCR) remained steady. This lack of uniformity, combined with the relatively mild declines, suggests the market may be entering a period of equilibrium rather than a dramatic downturn.
2. Landed Property Prices: A Temporary Dip?
The significant drop in landed property prices might seem alarming, but history shows that these properties tend to be more volatile. Just last year, landed prices dropped by 3.6% in Q3 2023, only to bounce back by 4.6% in the following quarter. With limited supply and ongoing demand, the current dip may be temporary rather than a sign of a prolonged correction.
3. Fewer New Launches, But Prices Could Rise Again
New launches often drive price increases in areas without fresh developments. In Q3 2024, we saw fewer new sale transactions—just 1,157 units compared to 1,927 in Q3 2023. In the CCR, the drop was even more pronounced, with only 55 units sold compared to 245 a year ago. As more new launches come to market, we may see private residential prices inching upwards again.
4. Demand Remains Steady
According to DataSense by PropertyGuru , demand for private properties, as measured by our Demand Index, has remained stable throughout Q3 2024. Meanwhile, the Supply Index for private properties has also stayed steady since 2023. With both demand and supply holding firm, prices are likely to remain balanced, supporting the idea that the market is plateauing.
Figure 2: Demand and Supply Indices of Private Housing
What Should Property Seekers Expect in Q4 2024?
In our next post, we’ll dive into specific private property enclaves and explore the unique dynamics driving these areas.
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Insightful breakdown, Nai Jia! It's fascinating to see how segment-specific trends offer a clearer picture of market stability. In times like this, understanding these nuances becomes crucial for staying competitive. The data-backed approach you’re using here highlights how a targeted analysis can help both investors and homeowners navigate the market with more confidence.
Past President at Institute of Estate Agents, Singapore
3 周Very Interesting !
Making Real Sense
3 周Thanks Nai Jia Lee for your insight. In my personal opinion, the current situation could be artificially stabilized in view of the impending General Election. The macro environment is in flux, which drives investors to safe Singapore. The interest rate is slightly down, which, again, props demand. The current economic environment here, which is an indicator of property buying health is recovering. All point to a healthy property market with little slump in the near future. It would be interesting if PropertyGuru used the difference between your Demand and Supply Index to correlate to property prices.