URA releases flash estimate of 1st Quarter 2024 private residential property price index

SINGAPORE, 1 April 2024 – The Urban Redevelopment Authority (URA) released the flash estimate of the price index for private residential property for 1st Quarter 2024 today.

A summary of the price trends is provided in the Appendix.

Ms. Chia Siew Chuin, Head of Residential Research, Research & Consultancy at JLL 谢岫君, 私宅市场研究部主管 (新加坡) commented:

“Private home prices remained fairly stable, with a slight q-o-q increase of 1.5% in 1Q24, slower than the 2.8% q-o-q rise in 4Q23, a period when overall prices were boosted by the strong sales of J'den and Watten House launches.

Generally, this reflects market resilience with prices remaining on an uptrend and fairly unaffected by the 20% q-o-q decrease in sales volume during the quarter. It also shows that while buyers are generally cautious, underlying demand from local resident buyers remains steady.

An analysis of the different market segments shows that price growths exhibit varying degrees of strength across different segments.

The landed segment was the top performer in 1Q24, recording a 3.4% q-o-q price increase, extending the rise of 4.6% in 4Q23. Demand for landed homes has been firm with buyers trying to upgrade into landed properties from condominiums or apartments.

The price growth in the non-landed segment was spearheaded by the Core Central Region (CCR), where prices of non-landed private homes continued to rise, albeit slowing from 3.9% in 4Q23 to 3.1% q-o-q in 1Q24. The highly successful preview of Watten House in November 2023 continued to support a high pricing baseline for new sales in the area when it officially opened its doors to the keen public in March. Leedon Green, which was newly completed in the previous quarter, registered a 2.3% increase in median prices in 1Q24. The soon to be completed projects such as Midtown Modern, Midtown Bay and Ikigai also recorded quarterly median price increases of 15.4%, 11.2%, and 2.3%, respectively in 1Q24.

In 1Q24, the sale prices of major new mass market projects in the Outside Central Region (CCR) were broadly in line with the prevailing market rates of approximately $2,100 - $2,200 psf being achieved by ongoing projects in their respective locales. Firm prices, along with a 15.5% q-o-q rise in new sale transactions in the locale, contributed to price stability of non-landed homes in the OCR, which edged up marginally by 0.4% in 1Q24.

For instance, in the Bukit Panjang area, Hillhaven, which was launched in January 2024 with prices starting from $1,903 psf, eventually recorded a median price of $2,067 psf in 1Q24. This is comparable with The Myst, which had an average launch price of $2,057 psf in July 2023 and a median price of $2,119 psf in 1Q24. Similarly, hovering around the same range, The Botany at Dairy Farm was introduced at an average launch price of $2,070 psf in March 2023 and registered a median price of $2,012 psf in 1Q24.

In the Lentor neighbourhood, Lentoria was priced at an average of $2,120 psf during its launch in March 2024, whereas Lentor Mansion was released at a slightly higher sale price ranging from $2,104 psf to $2,478 psf in the same month, compared to around $2,100 psf at the other ongoing projects in the Lentor area. Lentor Modern, the integrated project was first launched for sale in September 2022 at prices ranged between $1,856 and $2,538 psf. Its median price in 1Q24 was $2,233 psf. Lentor Hills Residences was introduced in July 2023 at an average of $2,080 psf and its median price in 1Q24 was $2,109 psf. The third project in the area, Hillock Green, was launched in November 2023 at an average price of at $2,108 psf and registered a median price of $2,131 psf in 1Q24. The higher unit price at Lentor Mansion is due to the project’s smaller-sized units, rising construction costs and the implementation of new floor area guidelines, which consider the actual liveable space and exclude areas such as aircon ledges from the saleable area.

The Rest of the Central Region (RCR) likewise showed price resilience despite a 27.0% q-o-q decline in overall sales volume. Non-landed home prices in the region inched up by 0.2% q-o-q, in 1Q24, rebounding from previous quarter's decline of 0.8%. This price uptick was primarily underpinned by the new launch of The Arcady at Boon Keng, a freehold 172-unit project at an average price of $2,570 per square foot in 1Q24.

Outlook

We expect prospective homebuyers to remained cautious and price sensitive under the weight of the April 2023 market cooling measures, economic uncertainties and prevailing high interest rates. Spoilt for choice, discerning homebuyers will likely maintain a selective stance, as they anticipate upcoming project launches to assess their options more comprehensively before committing to a purchase.

Barring unforeseen circumstances, developers are likely continue adopting sensitive pricing strategies to move sales, but substantial price corrections are not expected. New project prices should remain firm due to the significant investments in land and development costs. Notably, projects with desirable locations and compelling offerings may have the potential to command higher selling prices.

Buyers’ confidence may strengthen on the back of the expect improvement in the economic conditions and some easing in interest rates in the second half of 2024. A robust launch pipeline should also stimulate home sales and support prices.

Taking cognizance of the above and barring any unseen circumstances, private residential home prices are projected to gain 3% - 5% in 2024, a moderation from the 6.8% rise in 2023.

Cooling measures are unlikely in the short term in view that the price increase in 1Q24 was measured and supported by genuine local demand that still remains prudent.

Appendix

The changes in the price indices for the different market segments between 4Q23 and 1Q24 are tabulated below:

^{Source: URA, JLL Research}