24 January 2025, Singapore - Overall private home prices and HDB resale flat prices posted quarter-on-quarter (QOQ) growth in Q4 2024, thanks to robust new private home sales and resilient public housing demand, respectively.

Q4 2024 URA Private Residential Property Index

Private home prices rose by 2.3% QOQ in Q4 2024, overturning the 0.7% QOQ decline in the previous quarter (see Table 1). This is the fastest pace of quarterly price growth since the 2.8% QOQ increase in Q4 2023. It takes the cumulative price increase for 2024 to 3.9% - continuing a multi-year trend of slowing price growth since 2022. The final print is unchanged from the flash estimates released earlier this month.

Table 1: URA Private Property Price Index (PPI)

Source: PropNex Research, URA

The non-landed private homes segment led the price increase in the quarter as prices climbed by 3.0%, helped by QOQ growths across all sub-markets as new launches propped up prices. In Q4 2024, prices in the Core Central Region (CCR), Rest of Central Region (RCR), and Outside Central Region (OCR) rose by 2.6% QOQ, 3.0% QOQ and 3.3% QOQ, respectively.

In the full-year 2024, non-landed private home prices in the RCR grew at the fastest pace, at a cumulative 5.8%, compared with that of the CCR at 4.5%, and the OCR at 3.7%. Notably, the price growth in the OCR has eased substantially from the 13.7% increase in 2023 which is positive for the mass market, as it would not be sustainable for prices to keep rising at a double-digit percentage pace.

Meanwhile, landed home prices fell for the second straight quarter in Q4 2024, dipping by 0.1% QOQ. In 2024, landed home prices rose by 0.9% cumulatively - marking the slowest yearly price increase in seven years since 2018. In Q4 2024, there were 485 landed home transactions in total, compared with 521 transactions in Q3, according to caveats lodged. Overall, the moderation in landed home prices can be partly attributed to muted transactions, limited new landed homes launched for sale, and the elevated interest rates weighing on landed home demand.

In Q4 2024, developers sold 3,420 new private homes (ex. EC), taking the full year sales to 6,469 units (see Chart 1) - marginally higher by 0.7% from the 15-year low sales of 6,421 units in 2023. Over in the resale market, 3,702 private homes were resold in Q4 2024, bringing the overall resale volume to 14,053 units in 2024 (see Chart 2), 24% higher than the 11,329 units resold in 2023 and the highest annual resale volume in three years. Owing to the surge in new homes sold, resale transactions made up 49.8% of the total sales in Q4 - the lowest proportion in 17 quarters.

Chart 1: New private home sales (ex. EC)

Chart 2: Private resale transaction volume

Meanwhile, private home rentals were flat in Q4 2024, and fell by 1.9% in the full-year 2024. This is the first yearly decline in rentals since the 0.6% drop in 2020. There were 8,460 private homes (ex. EC) that have been completed in 2024, and completions are expected to taper to 5,846 private homes (ex. EC) in 2025 which could help to support rentals this year.

Mr Ismail Gafoor, CEO of PropNex Realty said:

"Following the strong performance in Q4 2024 and the continued healthy sales at new launches, The Orie and Bagnall Haus in January 2025, we expect private home sales to do fairly well in 2025, barring any unforeseen events or new cooling measures. In 2024, the URA PPI grew by 3.9% which is in tandem with the 4% GDP growth, based on advance estimates from the Ministry of Trade and Industry.

The pace of price growth has also slowed from the 6.8% increase in 2023, the 8.6% growth in 2022, and 10.6% jump in 2021. We remain watchful on price trends, and for now we believe the existing measures are still adequate in maintaining a stable property market. We trust that the government will monitor the situation closely before introducing further measures as there may be unintended negative impact should there be an overcorrection - including a supply overhang if demand falls sharply, potential impact on genuine homebuyers, households' net worth may be affected if home values decline substantially, and other knock-on effects in the real estate sector.

We are expecting a diverse pipeline of new projects this year - including new ECs, private condo projects, and mixed-use developments - lined up in different towns. From our observations, the key sales drivers will include project- and location-specific attributes, the potential pent-up demand in that area, and keen interest from HDB upgraders. Given the location of some of the upcoming new launches, we expect to see good response from prospective buyers, including first-time homebuyers and HDB upgraders. For instance, projects like ELTA, Parktown Residence, and Lentor Central Residences are situated in Clementi, Tampines, and Ang Mo Kio planning areas, respectively. We think these towns, and nearby housing estates may potentially have a sizable catchment of HDB upgraders demand.

In addition, the three projects are well-located - ELTA is a short distance from the Clementi MRT station and is near a number of schools, Parktown Residence is part of an integrated development and will be connected to the future Tampines North MRT station, while Lentor Central Residences in the new Lentor Hills estate is within walking distance to the Lentor MRT station. These projects have attributes that could appeal to buyers and investors. In particular, it is possible that ELTA and Parktown Residence could see some pent-up demand. We note that the last new launch near ELTA was Clavon which hit the market in 2020, while the last new launch in Tampines was Treasure at Tampines in 2019.

Another upcoming project is Aurelle of Tampines EC, next to Tenet EC which was launched for sale by the developer in December 2022. The 618-unit Tenet EC sold 72% of its units on launch day, and is almost fully sold based on caveats lodged (617 units sold up till 18 Dec 2024). In view of the strong sales at Tenet and the limited unsold stock of new ECs on the market, we similarly expect Aurelle of Tampines to do well.

By way of broad estimates, we think OCR average prices for new homes may potentially range from $2,200 to $2,500 psf, RCR average prices could be around $2,600 to $2,800 psf, CCR average prices may hover at above $3,000 psf, while EC average prices look likely to trend above $1,650 psf in 2025. In terms of price quantum, we expect a substantial proportion of sales will likely be done at below $3 million. That being said, pricing will depend on a few factors, including the land price, location of the project, the strength of the demand for units, whether the site is affected by the GFA harmonisation rule, and prevailing market conditions.

In 2025, our current projection is for overall private home prices to rise by 3% to 4%, while new home sales could come in at 8,000 to 9,000 units (ex. EC). In the resale market, the number of private homes resold may potentially hover at around 14,000 to 15,000 units in 2025. We anticipate that the sizable price gap between new and resale private homes will continue to be a key driver of the resale market. In 2024, the median transacted price of non-landed new private homes (ex. EC) was $2.1 million compared with $1.6 million for resale non-landed private homes, representing a price gap of about 31%."

Q4 2024 HDB Resale Price Index

Statistics released by the Housing and Development Board (HDB) showed that resale flat prices climbed by 2.6% QOQ in Q4 2024, moderating from the 2.7% QOQ growth in the previous quarter. The final print is marginally higher than the flash estimates of a 2.5% QOQ increase. This marks the 19th straight quarter of price increase in the HDB resale segment. Cumulatively, the HDB resale price index has risen by 9.7% in 2024 - accelerating from the 4.9% price increase in 2023 (see Table 2).

The HDB said that 6,424 flats (see Chart 3) were resold in Q4 2024, marking a 21.1% decline from the 8,142 resale flats transacted in Q3 2024. In the full year 2024, 28,986 resale flats changed hands, representing an 8.4% increase from 26,735 flats resold in 2023.

Table 2: HDB Resale Price Index

Source: PropNex Research, HDB

Chart 3: HDB resale flat transaction volume

Ms Wong Siew Ying, Head of Research and Content, PropNex Realty said:

"HDB resale flat prices grew at a slightly slower pace in Q4 2024, following three quarters of stronger QOQ growth from Q1 2024. Accordingly, the HDB resale price index was pulled higher in 2024, rising by 9.7% and has surpassed the 4.9% increase in the previous year. This makes the HDB resale flat segment the best performer in the housing market in 2024.

The sharper price growth has prompted the government to implement new cooling measures in August 2024, by cutting the loan-to-value (LTV) limit for HDB home loans from 80% to 75%. Meanwhile, in September 2022, the government introduced a temporary 15-month wait-out period before former private residential property owners who have sold their private home are allowed to purchase a non-subsidised HDB resale flat. It is likely that the measures are still working through the market, and we note that the pace of price growth did slow slightly in the immediate quarters following their introduction.

With the cooling measures in place, the continued injection of a sizable number of new flats, and price resistance among buyers, we expect HDB resale prices could grow at a slower pace this year, to the tune of 5% to 7% in 2025 compared with 9.7% increase in 2024.Meanwhile, the HDB resale volume may hover at around 29,000 to 30,000 units this year, supported by demand from those who have more pressing housing needs, applicants who did not manage to secure a resale flat, and households with a tighter budget seeking more affordable homes. There will also likely be demand for resale flats from former private home owners who have exited the 15-month waiting period, and permanent residents.

In view of fewer resale flats that are estimated to reach the 5-year minimum occupation period (MOP) in 2025 (at around 7,400 units versus 13,000 units in 2024, using completion status as a proxy), there may be tightness in the stock available for resale which may lend support to resale prices. With more private condo launches lined up in 2025, it is also possible that some HDB upgraders may opt to sell their flat first before buying a private home, in order to avoid having to pay the hefty ABSD upfront. Depending on the cost of a replacement home and their financial circumstances, flat owners may be inclined to hold on to their asking price."