Singapore witnessed a notable slowdown in the growth of private home prices, which increased by only 1.4%. This deceleration is a significant shift from the 2.8% growth observed in the last quarter of 2023. The Urban Redevelopment Authority (URA) highlighted that this slowdown was influenced by a combination of factors including softer economic conditions, a slowdown in wage growth, and persistently high interest rates.
Key Factors Influencing the Market
Economic Conditions and Interest Rates
The economic backdrop has played a crucial role in shaping buyer sentiment and market dynamics. As noted by Wong Xian Yang, head of research at Cushman & Wakefield, despite the introduction of new major launches, the take-up rate has slightly decreased. In the first quarter of 2024, new major launches were about 39% sold out, compared to an average take-up of 54% in the same quarter of the previous year.
Transaction Volumes and High-End Segment Performance
The overall private residential sales volume saw a decline of 2.4%. However, certain segments of the market, particularly the high-end segment, demonstrated resilience. Noteworthy transactions included new sale transactions at 19 Nassim, Watten House, and Cuscaden Reserve, as well as two resale deals at The Ritz-Carlton Residences Singapore Cairnhill, each fetching $16.5 million.
The Role of Local and Foreign Buyers
The market dynamics have also been affected by regulatory changes, specifically the hike in the Additional Buyer’s Stamp Duty, which has sidelined many foreign buyers. Despite this, local buyers continue to show strong interest in prime district homes, indicating robust underlying demand and healthy household liquidity, as pointed out by Chia Siew Chuin, JLL’s head of residential research for Singapore.
Market Outlook
Looking ahead, experts like Ismail Gafoor, chief executive of PropNex, remain cautiously optimistic. They anticipate that private home prices will continue to be supported by new launches and resale transactions in the high-end segment. This suggests that while the market may face challenges, there are segments that are likely to maintain their momentum. The first quarter of 2024 has set a precedent for the Singapore private residential market. With the growth rate tapering to 1.4%, it reflects the market's sensitivity to broader economic factors and regulatory changes. However, the resilience in the high-end segment and the sustained interest from local buyers provide a silver lining, suggesting that while the market may be slowing, it is far from stagnant.
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