The latest report by OrangeTee Research & Analytics reveals that private resale home prices remained steady in the third quarter of 2024, despite the prevailing high-interest rate environment. According to data from the Urban Redevelopment Authority (URA), the average resale prices for landed and non-landed private residential homes, excluding executive condos (ECs), held at $1,713 per square foot (psf) from the second to the third quarter of 2024. However, there were some fluctuations in average resale prices in the Core Central Region (CCR), Rest of Central Region (RCR), and Outside of Central Region (OCR).
In the CCR, there was a 1.6% increase in average resale prices from $2,145 psf in the second quarter to $2,181 psf in the third quarter. This partially reverses the 3.6% quarter-on-quarter (q-o-q) price drop recorded in the first to second quarter of 2024. Similarly, prices in the RCR also saw an increase, with a growth of 1.4% from $1,837 psf to $1,863 psf during the same period. This marks a moderation from the 3.1% q-o-q price growth seen in the previous quarter. In contrast, the average price of private residential resale homes in the OCR dropped by 0.4% from $1,495 psf to $1,489 psf in the third quarter of 2024, representing a reversal from the 3.5% growth seen in the second quarter.
Despite these fluctuations, there remains robust demand for resale homes. In terms of volume, URA recorded 3,860 resale homes sold in the third quarter, a 1.5% q-o-q increase from the 3,802 units sold in the second quarter of 2024. Resale transactions made up 71.9% of a total of 5,372 residential sales, including new sales, resale, and subsale, in the third quarter. This is a drop from the record-high market share of 77.4% recorded in the second quarter, according to OrangeTee.
In the first nine months of 2024, a total of 10,351 resale homes were sold, showing a 21.8% year-on-year (y-o-y) increase from the 8,498 units transacted over the same period in 2023. The market share of resale homes also saw a similar increase, growing from 57.8% in the first three quarters of 2023 to 71.3% over the same period in 2024.
This strong demand for resale homes could be attributed to the significant increase in housing supply over the past two years, with close to 30,000 private homes completed. As the available supply expands, it provides more housing options for potential buyers. Additionally, buyers may also turn to the secondary market for more affordable private housing as new home prices remain high.
For instance, Norwood Grand, a recently launched condominium in the OCR, sold 293 units at an average price of $2,086 psf since its launch in October, marking a 39.5% premium over the average price of $1,495 psf in the region. Similarly, the recently launched RCR project Meyer Blue sold 122 units at an average price of $3,252 psf the same month, which is 74.5% higher than the average price of resale units in the RCR.
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When it comes to investing in property in Singapore, it is crucial for foreign investors to familiarize themselves with the regulations and limitations in place. Singapore allows foreigners to purchase condos with relatively few restrictions, unlike landed properties which have stricter ownership rules. However, foreign buyers are required to pay the Additional Buyer’s Stamp Duty (ABSD) of 20% for their first property purchase. Despite this added expense, the Singapore real estate market remains a desirable destination for foreign investment due to its stability and potential for growth. In fact, Singapore condos are particularly attractive to foreign buyers due to their accessibility and potential for high returns.
The recent interest rate cuts by the US Federal Reserve may also spur luxury home sales due to the reduced cost of borrowing. However, high-net-worth investors who are less sensitive to interest rate fluctuations may not base their property purchase decisions on mortgage rates. Nevertheless, buyers who were previously cautious due to high interest rates may now be more inclined to enter the market.
OrangeTee predicts that resale prices will continue to grow in the upcoming years, given the projected decrease in available stock. Approximately 5,300 private homes are expected to be completed in 2025, a significant increase from the 9,100 units expected to be completed this year. Therefore, OrangeTee’s report forecasts positive prospects for resale homeowners, barring any major economic downturns or unforeseen circumstances.