Press Release
26 Apr 2024
URA has just released the Q1 2024 real estate statistics.
https://www.ura.gov.sg/Corporate/Media-Room/Media-Releases/pr24-19
Prices
Private home prices grew at a slower pace in the first quarter of 2024, according to data released by the Urban Redevelopment Authority (URA). The URA property price index (PPI) rose 1.4 per cent in Q1 2024, easing from the 2.8 per cent growth in Q4 2023. Last quarter’s price growth was led by non-landed homes in the prime areas or Core Central Region (CCR), which saw prices rise by 3.4 per cent. Meanwhile, prices in the city fringe or Rest of the Central Region (RCR) and in the suburbs or Outside the Central Region (OCR) rose marginally by 0.3 per cent and 0.2 per cent, respectively.
Last quarter’s price growth could be attributed to a larger percentage of new home sales (excluding executive condominiums or EC), which went up from 25.2 per cent in Q4 2023 to 27.5 per cent in Q1 2024. On the other hand, resales decreased from 65.3 per cent to 63.6 per cent over the same period. New homes are usually priced higher than resale.
Volume
Private home sales (excluding ECs) contracted for the third consecutive quarter, declining by 2.4 per cent to 4,230 units in the first quarter of 2024 from 4,334 units in Q4 2023. Sale activities are generally slower in the first quarter due to the Chinese New Year festivities and March school holidays.
However, new sales volume picked up last quarter. More developers stepped up on launches over the past month. With more home choices, buyers returned to the primary market. Moreover, some of these projects were located in the suburbs, which tend to be more affordable compared to those in the city fringe and luxury segments. Therefore, the number of new home sales in the Outside of Central Region OCR rose to 823 units in Q1 2024, which is the highest number of quarterly transactions since Q3 2022 (1,244 units).
Rental
In the last quarter, rental prices dipped across all segments. Rents for landed properties slipped the most by 4.2 per cent q-o-q in Q1. As rents continue to moderate, vacancy rates have also decreased from 8.1 per cent in Q4 2023 to 6.8 per cent in Q1 2024, showing that more people may have returned to the private rental market since rents are now cheaper.
Looking ahead, we predict that rental prices may dip by 1 to 4 per cent in 2024. As domestic demand for rental properties continues to shrink, overall rental transactions may fall to around 70,000 to 75,000 units in 2024.
Outlook
We expect prices to grow at a steady rate at around 3 to 6 per cent this year. New home demand may remain resilient as more projects are slated for launch in Q2. It is anticipated that between six and nine large projects, each with over 500 units, could be launched this year. This may result in sales exceeding 1,000 units for certain months. In comparison, four large projects were launched in 2021, only one in 2022 and six in 2023.
If interest rates moderate in the second half of this year, buying sentiment may pick up in tandem. As mortgages become more affordable and financial costs improve, home buyers may feel more motivated to purchase or upgrade their homes. The impact may be more noticeable for resale homes due to the immediate impact of interest rate fluctuations on loan repayment.