Rents drop by another 1.9% in Q1. Private home prices are up 1.4%.

Urban Redevelopment Authority figures released on Friday (Apr. 26) show that private residential property prices rose 1.4% in the first three months of 2024. This was just a little lower than the flash estimate of 1.5 per cent by the agency earlier in the month. It follows a growth of 2.8 percent for the previous quarter.

The quarterly increase of 1.4% is the lowest since Q3 2020, when it was only 1.1 %.

Rents declined by 1.9 per cent during Q1, adding to the 2.1% decline experienced in the preceding quarter.

The slower rate of price growth is a reflection of the cautious attitude among homebuyers to “high prices levels amid slower wages growth and softer conditions in the economy”.

Prices of private homes have risen by 34,3% since the Covid pandemic

The increased interest rates and the penalty of 60 per cent ABSD for foreigners, which will take effect in late April 20,23, have led to a growing resistance against high prices. In 2023, developers sold 6,421 homes, the lowest number in 15 years.

Song said that uncompleted inventory (excluding ECs), grew 17.8 per cent to 19,936 in Q1 from 16,929 in the Q4 2023. In Q1, the unsold inventory increased by 17 percent, to 20,204 completed units.

The first quarter of 2024 saw a rise in home values led by landed properties, which rose 2.6% from 4.6% in the previous period.

The prices of non-landed homes rose by 1% in Q1 compared to a 2.3% rise in the prior quarter.

Prime Core Central Region prices (CCR) accounted for the price increases in Q1, which rose 3.4%. The Rest of Central Region (RCR) and Outside Central Region (OCR) saw modest increases of 0.3% each.

The public launch in CCR of Watten House appeared to boost sentiment, as existing projects like Perfect Ten or Leedon Green experienced higher median prices.

CCR purchases could help prices catch up with those in other regions. CCR prices increased by approximately 11 per cent between 2021-2023. They are far behind other regions that have seen prices rise over 30 per cent.

For the third quarter in a row, overall sales volume dropped by 2.4 percent to 4,230 unit

Sales of resale items fell by 5% to 2,689 and sales of sub-sales were down 8.3% to 377.

New sales were the only market that showed improvement, with volume increasing by 6.6% to 1,164 unit in Q1. The increase in private home sales was due to developers launching more homes, 1,304 units (excluding executive condominiums) compared to Q4’s 1060.

The Q1 take-up rates of new launches were still lower than in the previous quarter. In Q1, new launches that sold more than 100 units were taken up at a rate of 39 percent, down from 54 percent a year earlier.

It is the lowest number of units sold in the first quarter since Q1 2008 when 762 were sold.

Developers may also be more conservative with their land bids and pricing new units to make them more affordable to local buyers. In Q1, median transaction price of non-landed private houses (excluding ECs), dropped from S$2.15m in the previous period to S$1.9m.

Easing rents

Rents declined by 1.9 percent in Q1, which was a continuation of the 2.1% decline seen in the preceding quarter.

Analysts predict “abundant” completions by 2023. Excluding ECs from the total, around 19,968 private houses were completed in 2017, which is the most since 2016 when there were 20,803 homes.

Only 241 of the 200 units in the Meyer Mansion freehold development, located in district 15, were completed during the first three months of the year. The number of net completed units actually dropped by 188, most likely due to the demolition and redevelopment of projects.

At the end of the first quarter, this rate dropped to 6.8 percent from 8.1 percent in Q4.

Based on the estimated completion dates, 10561 private homes (including ECs) are expected to be finished in 2024’s remaining three-quarters. A further 6,316 units should be finished in 2025.

Analysts anticipate that rents are likely to continue to fall in the next few months

Rents are likely to fall as much as 5 percent this year, given the rise in housing stock and lower numbers of expats.

Rents are likely to stabilize next year as the number of new units completed in 2025-2026 is expected to fall from 13,275 units per decade, on average, to 6,691 units each.

Even so, a healthy pipeline for new project launches will stimulate the market’s activity and demand for homes.

Analysts predict that the trend is likely not to change as housing stocks increase and demand decreases.

Singapore’s housing prices rose at the lowest quarterly rate in almost three year as home sales decreased, supply increased, and rents dropped further in the 1st quarter of 2024.

Analysts said that downward pressure is likely to continue on the private residential sector in the coming months as both home purchasing and rental demand will moderate amid economic uncertainty.

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