Commentary on the flash estimate of Q4 2024 and FY 2024 private residential property price index

By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

URA’s flash estimate of the price index for private residential properties for Q4 2024 shows that Singapore’s private housing prices rebounded following Q3 2024’s decline, rising 2.3% q-o-q on the back of strong sales and benchmark prices set at a slew of new launches in the quarter amid lower interest rates.  

This brings 2024’s full-year price growth to 3.9%, a moderation from 2023’s 6.8%. This came alongside tepid developer sales in 9M2024 on weak economic conditions, buyer fatigue, and increasing resistance to high price points. H1 2024 new sales volumes slumped to 1,889 units, the lowest half-year developer sales on record, even below the 1,977 units recorded in H2 2008 during the Global Financial Crisis (GFC), and remained muted in Q3 2024 at 1,160 units. 

Sales have, however, recovered strongly on pent-up demand, wealth effect from the recovering stock markets, and lower interest rates following the start of the Fed rate cut cycle in Sep 2024. Based on caveats downloaded from realis on 2 Jan 2025, 3,398 new private homes (excluding ECs) were sold in Q4 2024, nearly triple Q3 2024’s 1,160 units, and above the 5-year quarterly average of 2,101 units.

Overall, private property price growth tracked economic growth in 2024, with the Q4 2024 GDP advance estimate released today (2 Jan 2025) registering a 4.3% y-o-y increase in Q4 2024 and taking full-year economic growth to 4%, a pickup from 1.1% in 2023. With home prices still aligned with economic fundamentals, we believe it is premature for more cooling measures. 

URA Q4 2024 Flash 

Flash estimates show that private home prices rose 2.3% q-o-q in Q4 2024, reversing the 0.7% q-o-q decrease in Q3 2024, and the highest quarterly growth since Q4 2023’s 2.8%. With this, prices in the whole of 2024 are up 3.9%, a slowdown from 2023’s 6.8% and 2022’s 8.6% and 2021’s 10.6%. Nonetheless it is now 37.7% above the COVID-19 trough in Q1 2020. 

Q4 2024 private home price increase was driven by non-landed properties which posted an increase of 3.2% q-o-q after Q3 2024’s marginal 0.1% q-o-q rise. In contrast, prices in the landed segment continued to correct, falling 0.9% q-o-q and extending the 3.4% q-o-q decline in Q3 2024. Full year non-landed prices rose 4.9% vs landed property price increase of 0.1%.  

With a surprise turnaround in sales volumes in the non-landed segment in Q4 2024, prices also outperformed. RCR and OCR non-landed segments which saw the bulk of new project launches in Q4 2024 led with similar price increases of 3.4% q-o-q. RCR’s boost was driven by the success of Meyer Blue, Emerald of Katong, Union Square Residences, Nava Grove which permeated into higher sales for earlier comparable launches such as Continuum, Tembusu Grand and Pinetree Hill. OCR’s improvement came on the back of successful launches of Norwood Grand and Chuan Park. 

CCR which saw only 1 new launch, The Collective at One Sophia (367 units) also improved 2.4% in Q4 2024, after declining 1.1% in Q3 2024, as some CCR projects cleared their unsold inventory after offering discounts in earlier 2024 such as Cuscaden Reserve and Klimt at Cairnhill.

Overall, prices in the CCR, RCR and OCR grew 4.3%, 6.2% and 3.8% for the whole year 2024 respectively. CCR and RCR prices outperformed 2023 full-year growth of 1.9% and 3.1% respectively while OCR price growth slowed from 2023’s blistering 13.7% increase. 

Outlook

Based on caveats downloaded from realis on 2 Jan 2025, 3,398 new private homes (excluding ECs) were sold in Q4 2024, nearly triple Q3 2024’s 1,160 units, and above the 5-year quarterly average of 2,101 units. This takes 2024 developer sales to 6,447 units, marginally higher than the 6,421 units sold in 2023. 

Looking ahead, buying appetite has returned in Q4 2024 amid lower mortgage rates and economic recovery and developers will be more likely to push ahead with launches. CBRE Research expects 7,000 – 8,000 new homes to be sold in 2025, an improvement from 2024’s 6,447 units on easing interest rates and better buying sentiment. However, while general take-up rates across new projects are expected to improve, buyers could remain selective in 2025 amid a myriad of new launch options. Attractive developer pricing remains key to healthy new launch performance.   

Private residential prices rose 3.9% in 2024, a moderation from 2023’s 6.8% growth. With interest rate cuts of about 100bps since Sep 2024 and likely to continue its downward trajectory (albeit not by much), private home prices should continue rising in 2025. Barring an economic recession or reversal of interest rate cuts and additional cooling measures, CBRE forecasts average private home prices to rise at a moderate pace of 3 – 6% in 2025 on lower interest rates, strong household balance sheets, low unsold inventory and an attractive pipeline of new launches which could set benchmark prices.