Singapore private home price growth slows for second consecutive quarter in Q2

Private residential price index rose by 0.9% QoQ.

Prices of private homes in Singapore continued to increase at a moderated pace in 2Q24. According to JLL, the overall private residential price index rose by 0.9% quarter-on-quarter (q-o-q) in 2Q24, marking the second straight quarter of a slowdown in price increase from 2.8% in 4Q23 and 1.4% in 1Q24.

With this, prices have strengthened by 2.3% in 1H24, moderated from the gain of 3.7% in 2H23 and 3.1% in 1H23.

Here’s more from JLL:

The underlying demand for private homes, healthy household liquidity, strong holding power and high home replacement costs all contributed to the sustained price increase in 2Q24. However, the price growth was reined in by a decline in total sales activity, as more expensive homes and persistently high interest rates prolonged market uncertainties, prompting prospective homebuyers to stay cautious and bid their time for more favourable conditions. This is particularly in light of the delay in interest rate cuts and growing price sensitivity among buyers.

The overall price growth was mainly driven by the landed market, bolstered by the aspiration of local buyers to upgrade, high construction costs and a limited supply of landed homes. However, the price increase decelerated for the second consecutive quarter to 1.9% q-o-q in 2Q24 after rising by 2.6% q-o-q in 1Q24.

The non-landed market witnessed different dynamics across the three market segments in 2Q24. Prices in the Core Central Region (CCR) edged down marginally by 0.3% q-o-q, following the 3.4% q-o-q rise in the previous quarter. Prices had adjusted after two quarters of continued growth, with demand from foreign homebuyers remaining under the weight of the increased Additional Buyer's Stamp Duty (ABSD) rate for foreigners. The absence of major price-leading new project launches in the CCR has also compounded the lack of interest during the quarter.

In the Rest of Central Region (RCR) home prices strengthen by 1.6% q-o-q. The modest price improvement can be attributed to the launch of The Hill @ One-North, where 43 units (approximately 30%) were sold at an average price of SGD  2,595 per square foot (sq ft) during its launch weekend.

In the Outside Central Region (OCR), prices inched up by 0.2% q-o-q in 2Q24, keeping pace with the gain in 1Q24. With the debut of only a few boutique-size projects, the dearth of major price-setting project launches in the OCR in 2Q24, resulted in the marginal price uptick. Furthermore, as homebuyers have become more selective and price-sensitive, this has capped the pace of price escalation. This is despite the underlying demand for upgrading from HDB households and the faster quarterly rise of 2.3% in the HDB resale price index in 2Q24.

In 1H24, prices in the CCR have appreciated by 3.0%, outperforming the gains of 1.9% in the RCR and 0.4% in the OCR. This suggests that suburban homes prices in the OCR might be reaching a threshold after recording an annual surge of 13.7% in 2023. In comparison, prices of non-landed private homes in the CCR and RCR increased by 1.9% and 3.1% in 2023, respectively.

The changes in URA’s price indices in 2Q24 are tabulated below.