Rising retrenchments, high interest rates slow private home price growth to 1.5% in Q1 – The Straits Times

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SINGAPORE – Private residential property prices in Singapore continued to moderate in the first quarter of 2024 as transaction volumes shrank, weighed down by economic uncertainty, rising retrenchments and still-high interest rates.

Between January and March, private residential property prices rose 1.5 per cent, after a 2.8 per cent gain in the fourth quarter of 2023, according to Urban Redevelopment Authority (URA) flash estimates released on April 1.

The number of units sold shrank by 20 per cent quarter on quarter, and by about 16 per cent year on year, dragged down by slower resale and sub-sale transactions, analysts said. A sub-sale is recorded when a buyer resells a property bought directly from a developer before a project is completed.

“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,” said property firm ERA Singapore’s key executive officer Eugene Lim.

“Others are deferring home purchases, hoping for better deals if interest-rate cuts materialise in the second half of 2024.”

Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, noted that the proportion of new home sales, excluding executive condominiums (EC), jumped to 31 per cent in the first quarter, from 25.4 per cent in the preceding quarter. Resale transactions, on the other hand, fell to 62.3 per cent, from 65.5 per cent.

“Therefore, price growth was still positive in the first quarter, as new homes are typically priced higher than resale homes,” she said.

Prices of non-landed properties gained 1 per cent in the first quarter, down from the 2.3 per cent growth in the previous quarter. Landed home prices rose 3.4 per cent in the first quarter, slower than the 4.6 per cent increase in the preceding quarter.

Quarterly gains were not significant in the suburbs and city fringe areas, which rose less than 1 per cent.

In the suburbs, prices of non-landed private homes rose just 0.4 per cent, down from the 4.5 per cent growth in the previous quarter. Prices of those in the city fringe edged up 0.2 per cent, compared with a 0.8 per cent drop in the fourth quarter of 2023.

Prices of non-landed private homes in the prime district climbed 3.1 per cent in the first quarter of 2024, compared with a 3.9 per cent increase in the preceding quarter.

Mr Lee Sze Teck, senior director of data analytics at real estate firm Huttons Asia, attributed price gains in the prime district to strong sales at Bukit Timah condominium Watten House, which is 74 per cent sold since its launch on March 2, and at 19 Nassim, in Tanglin, which reached temporary occupation permit recently.

Ms Sun expects new home demand to remain resilient, as more projects are slated for launch in the second quarter of 2024.

Between six and nine large projects, each with more than 500 units, could be launched in 2024. This may result in sales exceeding 1,000 units during certain months.

In comparison, six large projects, excluding ECs, were launched in 2023, she said.

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