Singapore

التالى السابق

Singapore ends 2024 on High

Analytics - 1 month ago

Singapore on 2025

South Eye | Analysis - Exclusive

As 2024 draws to a close, Singapore's private residential property market has exhibited notable activity, characterized by a late-year surge in transactions and price movements. This development has prompted discussions among analysts and stakeholders regarding the sustainability of this momentum into the forthcoming year.

Market Performance in 2024

Throughout 2024, the private residential property market in Singapore experienced fluctuations influenced by various economic and policy factors. In the first half of the year, the market demonstrated moderate growth. According to the Urban Redevelopment Authority (URA), the private residential property price index increased by 1.1% in the second quarter, following a 1.4% rise in the first quarter. This resulted in an average quarterly price increase of 1.3% in the first half of 2024, which was lower than the average quarterly increases of 1.7% in 2023 and 2.1% in 2022.

However, the third quarter of 2024 marked a shift, with the market experiencing a decline. The URA reported a 0.7% decrease in private residential property prices during this period, the first decline since the second quarter of 2023. This downturn was observed across all market segments, with landed property prices decreasing by 3.4% and non-landed property prices showing a marginal increase of 0.1%.

Late-Year Surge

Despite the third-quarter decline, the latter part of 2024 witnessed a resurgence in market activity. Developers launched 1,284 uncompleted private residential units (excluding Executive Condominiums) in the third quarter, a significant increase from the 634 units launched in the previous quarter. Correspondingly, sales also rose, with 1,160 units sold compared to 725 units in the second quarter.

This late-year burst can be attributed to several factors:

• Pent-Up Demand: Potential buyers who had adopted a wait-and-see approach earlier in the year may have entered the market, spurred by new project launches and attractive pricing strategies.

• Economic Indicators: Positive economic data and improved employment figures could have bolstered consumer confidence, encouraging property investments.

• Interest Rate Environment: While domestic mortgage rates remained elevated relative to the low levels seen over the past decade, the recent U.S. Federal Reserve rate cut may have influenced perceptions, prompting buyers to act before potential future rate adjustments.

Sustainability of Momentum into 2025

Analysts are cautiously optimistic about the market's trajectory as it transitions into 2025. Several considerations temper expectations of sustained momentum:

• Supply Pipeline: There are approximately 52,200 private housing units in the supply pipeline, slated for completion over the next few years. This substantial supply could exert downward pressure on prices and rental yields if not matched by commensurate demand.

• Macroeconomic Uncertainties: While Singapore's macroeconomic conditions remain sound, the economic outlook is subject to uncertainties, particularly stemming from ongoing geopolitical conflicts that could precipitate negative global supply and demand shocks. Such uncertainties may affect buyer sentiment and investment decisions.

• Government Policies: The government's commitment to maintaining market stability is evident through measures such as the Government Land Sales Programme, which aims to release a total supply of 11,110 private residential units in 2024, the highest in a single year since 2013. Additionally, the government continues to calibrate supply to account for prevailing economic and property market conditions.

• Interest Rates: Despite the recent U.S. Federal Reserve rate cut, domestic mortgage rates are expected to remain elevated relative to the low levels seen over the past decade. This environment necessitates prudence among households when purchasing properties and taking on mortgage loans.

The late-year surge in Singapore's private residential property market reflects a complex interplay of demand dynamics, economic indicators, and policy influences. While the recent uptick in activity is encouraging, the sustainability of this momentum into 2025 remains uncertain. Market participants are advised to exercise caution, considering the potential impact of increased supply, macroeconomic uncertainties, and policy measures on future market conditions.