Private residential prices experienced slower growth in the first half of this year. The URA property price index (PPI) released by the Urban Redevelopment Authority (URA) rose by a smaller rate of 0.9 per cent in the second quarter of 2024, reflecting a further easing from the 1.4 per cent growth seen in Q1 2024 (Chart 1). 

For the first half of 2024, prices grew by 2.3 per cent, lower than the 3.1 per cent in 1H 2023 and the 4.2 per cent in 1H 2022.

Q2's slower overall price growth may be attributed to the smaller price gains for both landed and non-landed private homes. Prices of non-landed properties – or condos and apartments – climbed by 0.6 per cent in the second quarter, down from the 1.0 per cent gain in the first quarter of 2024. Landed prices rose by a smaller pace of 1.9 per cent in Q2, down from the 2.6 per cent growth in the preceding quarter.

Among the sub-markets, prices of condos and apartments in the luxury or the Core Central Region (CCR) dipped marginally by 0.3 per cent in Q2 2024, reversing the 3.4 per cent gains in the first quarter. Prices in the suburbs or Outside Central Region (OCR) saw a slight increase of 0.2 per cent in the second quarter, remaining unchanged from the 0.2 per cent rise in the first quarter. Prices increased the most by 1.6 per cent in the city fringe or the Rest of Central Region (RCR) (Chart 2). 

Private home sales (non-landed and landed excluding executive condominiums or ECs) increased by 16.2 per cent from 4,230 units in the first quarter of 2024 to 4,915 units in the second quarter (Chart 3). 

              

On the other hand, the primary market exhibited a more subdued performance, with new sales volume falling by 37.7 per cent from 1,164 units in Q1 2024 to 725 units in Q2 2024. 

Despite fewer new homes being transacted last quarter, the average price of new private homes (including landed and non-landed, excluding EC) rose 2.5 per cent from S$2,353 per square foot (psf) in the first quarter to S$2,411 psf (Table 1), based on URA Realis data. 

With strong demand, overall average resale prices rose 1.1 per cent, from S$1,695 psf to S$1,714 psf over the same period. 

By market segment, the average price of private homes in the Core Central Region (CCR) decreased by 3.7 per cent, falling from S$2,376 psf in Q1 to S$2,287 psf in Q2. This price decline was driven by a 3.6 per cent decrease in resale prices. In contrast, new sale prices in CCR increased by 4.6 per cent. 

The average price of private homes (excluding ECs) in the city fringe or RCR rose by 0.9 per cent from S$1,973 psf in Q1 2024 to S$1,991 psf in Q2 2024 (Chart 4). The price increase was led by a 2 per cent increase in new sale prices and a 3 per cent rise in resale prices. 

In the suburbs, prices of condos (excluding ECs) dipped by 5.5 per cent from S$1,719 psf in Q1 2024 to S$1,624 psf in Q2 2024. Last quarter’s price drop was driven by a 3.5 per cent decline in new home prices from S$2,190 psf to S$2,114 psf over the same period.

Based on current economic indicators, private home prices are expected to maintain a stable growth trajectory for the rest of the year, given our steady economy and favourable employment prospects. Most consumers will likely remain prudent in their financial decision-making even though inflationary pressures are easing. Since interest rates have not decreased as rapidly as expected, most buyers may opt for affordable housing options, such as resale or smaller new private homes. As a result, significant increases in home prices are not anticipated. Our full-year price forecast for 2024 has been revised and narrowed from 3 - 6 per cent to 4.5 - 5.5 per cent.

Demand for resale homes may stay robust, with sales volume for the entire year potentially matching last year's levels. We anticipate an uptick in new home sales, driven by the launch of several major projects in the second half of the year. However, the total new sales volume for 2024 may still be lower than previous years, estimated to be between 5,000 and 6,200 units, due to the historically low number of new launches this year.