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April 18, 2024
Lack Of Impetus Led To Subdued Residential Property Sales In Q1 2024; But Home Prices Held Firm
Wong Siew Ying
Head of Research and Content at PropNex Realty
It seems like 2024 has started in somewhat of a similar fashion to how 2023 ended, with languid home sales amidst market uncertainties.
The early months of Q1 2024 were perhaps marked by a lack of impetus to sales, as many buyers took their time to return to the market - evaluating their options in the light of the cautious sentiment, high interest rates, and peaking home prices.
However, positive signs are beginning to show, with new launch project Lentor Mansion achieving a 75% take-up when it hit the market in March, and with the re-launch of Cucasden Reserve gathering sales momentum.
Private residential market
In the private residential market, developers’ sales got off to a slow start before picking up in March. Based on URA monthly home sales data, there were 1,175 new private homes (ex. EC) sold in the year-to-31 March period – slightly better than the 1,092 units sold in Q4 2023. However, it has underperformed the 1,256 new units transacted in Q1 2023.
The best-selling new private residential project during this period was Lentor Mansion in the Outside Central Region (OCR), which shifted 409 out of its 533 units. This was followed by Hillhaven and Lentoria – also in the OCR – which sold 79 and 60 units respectively, in Q1 2024.
Over in the resale market, 2,603 units of non-landed and landed private homes were sold – down from 2,831 units resold in the Q4 2023, and marginally lower than the 2,622 units transacted a year ago in Q1 2023, according to caveats lodged.
Despite the relatively muted sales in Q1 2024, the median transacted unit price of new and resale non-landed private homes are fairly stable, either reflecting a dip of 1.9% QOQ to an increase of 2.2% QOQ, based on caveats lodged (see Table 1).
According to the URA property price index flash estimates released on 1 April 2024, the overall private home prices rose by 1.5% QOQ in Q1 2024 – marking the third straight quarter of price increase following the 0.8% QOQ growth in Q3 2023, and 2.8% growth in Q4 2023.
Table 1: Median unit price ($PSF) of non-landed private homes sold (ex. EC) by type of sale and region by quarter
| CCR | RCR | OCR | ||||||
| New sale | Resale | Gap % | New sale | Resale | Gap % | New sale | Resale | Gap % |
2023Q1 | $2,926 | $2,114 | 38.4% | $2,651 | $1,658 | 59.9% | $2,073 | $1,317 | 57.4% |
2023Q2 | $2,905 | $2,096 | 38.6% | $2,493 | $1,688 | 47.7% | $2,024 | $1,369 | 47.8% |
2023Q3 | $2,923 | $2,001 | 46.1% | $2,507 | $1,711 | 46.5% | $2,080 | $1,385 | 50.2% |
2023Q4 | $3,196 | $2,086 | 53.2% | $2,513 | $1,766 | 42.3% | $2,265 | $1,425 | 58.9% |
2024Q1 | $3,233 | $2,103 | 53.7% | $2,568 | $1,775 | 44.7% | $2,221 | $1,408 | 57.7% |
QOQ % | 1.2% | 0.8% | | 2.2% | 0.5% | | -1.9% | -1.2% | |
YOY% | 10.5% | -0.5% | | -3.1% | 7.1% | | 7.1% | 6.9% | |
Meanwhile, the proportion of non-landed new and resale private homes (ex. EC) purchased by foreigners (non-PR) remained low, as the tighter additional buyer’s stamp duty (ABSD) measure continues to bite. In Q1 2024, foreigners (NPR) accounted for just 1.3% of the overall non-landed new and resale private home transactions (ex. EC) (see Table 2) – compared with 7.2% in Q1 2023, before the ABSD rate for foreign buyers was doubled to 60%.
With the punitive ABSD rate keeping foreign investment interest in check, Singaporean buyers continue to make up a lion’s share of home sales, accounting for 82.3% of the new and resale private non-landed home transactions during the quarter.
Table 2: Proportion of non-landed new and resale private homes (ex. EC) sold by nationality by residential status by quarter
Nationality by Residential Status | 2022Q1 | 2022Q2 | 2022Q3 | 2022Q4 | 2023Q1 | 2023Q2 | 2023Q3 | 2023Q4 | 2024Q1 |
Company | 0.1% | 0.2% | 0.1% | 0.2% | 0.7% | 0.1% | 0.1% | 0.1% | 0.0% |
Foreigner (NPR) | 3.1% | 4.9% | 4.7% | 7.2% | 7.2% | 4.2% | 1.8% | 1.7% | 1.3% |
Singapore Permanent Residents (PR) | 18.0% | 17.1% | 15.9% | 20.8% | 19.9% | 16.1% | 16.7% | 16.3% | 16.3% |
Singaporean | 78.7% | 77.9% | 79.2% | 71.8% | 72.2% | 79.5% | 81.4% | 81.9% | 82.3% |
Notwithstanding the relatively flat sales in Q1 2024, PropNex expects market activity could pick up from the second quarter onwards, with more new launches set to come on. In addition, the Singapore economy is also projected to improve in the latter half of the year, which could help to boost buyers’ confidence. Meanwhile, the prospects of possible cuts in interest rates – which may happen in the second half of 2024 – could spark housing demand as some buyers return to the market.
PropNex expects overall private home prices could rise by 4% to 5% in the whole of 2024, slower than the 6.8% in 2023. Meanwhile, developers’ sales are expected to come in at around 7,000 to 7,500 units (ex. EC) in 2024.
HDB resale market
In the HDB resale segment, transactions picked up in Q1 2024, helping to drive the 16th straight quarterly increase in HDB resale flat prices. The HDB noted that 6,928 flats were resold in Q1 2024 (till 27 March); this is already higher than the 6,547 units transacted in the whole of Q4 2023. It is likely that the resale volume for the full Q1 2024 could surpass the 6,979 units resold in Q1 2023.
Table 3: Average transacted resale price by flat type by quarter
| Average transacted HDB resale prices | |||||
1 ROOM | 2 ROOM | 3 ROOM | 4 ROOM | 5 ROOM | EXECUTIVE | |
2023Q1 | $237,000 | $315,216 | $408,922 | $571,995 | $672,674 | $813,736 |
2023Q2 | $245,500 | $321,255 | $410,084 | $579,740 | $685,707 | $827,549 |
2023Q3 | | $324,315 | $413,189 | $590,299 | $689,904 | $837,138 |
2023Q4 | $243,333 | $324,748 | $415,632 | $594,366 | $693,518 | $839,293 |
2024Q1 | $230,000 | $330,502 | $422,788 | $601,886 | $704,078 | $854,230 |
| QOQ % change in average HDB resale prices | |||||
1 ROOM | 2 ROOM | 3 ROOM | 4 ROOM | 5 ROOM | EXECUTIVE | |
2023Q1 | 1.1% | 2.7% | 2.3% | 1.6% | 0.5% | 2.3% |
2023Q2 | 3.6% | 1.9% | 0.3% | 1.4% | 1.9% | 1.7% |
2023Q3 | - | 1.0% | 0.8% | 1.8% | 0.6% | 1.2% |
2023Q4 | - | 0.1% | 0.6% | 0.7% | 0.5% | 0.3% |
2024Q1 | -5.5% | 1.8% | 1.7% | 1.3% | 1.5% | 1.8% |
The healthy demand for resale flats has lent support to resale prices, with the HDB resale price index gaining by 1.7% QOQ in Q1 2024, as per flash estimates. This is also the strongest quarterly growth in HDB resale prices in five quarters. Based on transaction data, the average price of most resale flat segments saw a quarterly increase in Q1 2024. The 2-room and executive flats led average price growth in Q1 2024, rising by 1.8% QOQ each to $330,500 and $854,200 respectively (see Table 3).
Factors that have contributed to the increase in the HDB resale flat prices in Q1 2024 could be the higher number of flats resold for at least $1 million during the quarter – potentially enjoying some renewed interest from former private home owners who have served out their 15-month wait-out period and are back in the market for a resale flat.
In Q1 2024, there were 185 flats that were resold for at least $1 million – setting a new quarterly high (see Chart 1) following the 133 million-dollar resale flats transacted in Q4 2023. The million-dollar resale flats made up 2.7% of the total transactions in Q1 2024, up from 2.1% in the previous quarter.
Chart 1: Number of million-dollar resale flats sold by quarter
Source: PropNex Research, Data.gov.sg (data up till 31 March 2024)
Generally, HDB resale demand is expected to remain healthy as the segment serves a large swathe of owner-occupiers. Resale prices, meanwhile, are stabilising and rising at a slower clip. PropNex projects that HDB resale prices could climb by 5% to 6% in full-year 2024. With fewer flats estimated to exit the 5-year minimum occupation period (MOP) in 2024 – projected at around 13,000 units – it could keep resale stock tight and help to support prices.
Other noteworthy highlights in Q1 2024
· There were several noteworthy points in Q1 2024 which necessitate a mention here, a key one being the government land sales (GLS) tender bid rejection by the Urban Redevelopment Authority (URA), which has deemed the bid for the Marina Gardens Crescent site as “too low”. In a tender that closed on 18 January 2024, the white site attracted a solitary bid of about $770.5 million – or at a land rate of $984 psf ppr - from a GuocoLand-led consortium. This was some way below the winning bid for an adjacent site in Marina Gardens Lane, which was sold to a Kingsford-led joint venture for $1.03 billion ($1,402 psf ppr) in July 2023.
· While developers have been very cautious with their land bids for private residential sites, they appear to be still confident about Executive Condo (EC) plots. An EC site in Plantation Close was awarded to Hoi Hup Realty and Sunway Developments at $423.4 million (land rate $701 psf ppr) in February. With a land rate upwards of $700 psf ppr, PropNex estimates that the average selling price of the new EC project could tip over $1,500 psf when it is launched.
· With EC projects still ringing in take-up rates of above 50% at their respective launch weekends, it is little wonder that developers take a greater interest in this housing segment. Lumina Grand EC in Bukit Batok shifted 53% of its 512 units when it hit the market in January, and is now 73% sold. Based on caveats lodged, the 374 transacted EC units fetched an average unit price of $1,514 psf overall. Lumina Grand is likely to be the only EC project to be launched for sale in 2024.
· Lentor Mansion – the fifth project to be rolled out in the upcoming Lentor estate - became the best-selling new launch project since the J’den hit the market. Lentor Mansion has sold 409 of its 533 units at an average price of around $2,280 psf; it is the first project to be affected by new rules on the harmonisation of gross floor area definitions.
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