Last quarter, new home sales in the city fringe area surged, reaching their highest level since Q3 2009, even as prices set new record highs. Consequently, the price difference between condos in the city fringe and prime areas decreased by more than 15 percentage points within a year, to the smallest price gap in over a decade.

PRICE TREND

Prices of private homes increased in the fourth quarter due to a surge in new home transactions. According to data from the Urban Redevelopment Authority (URA), the overall price index for private residential properties rose by 2.3 per cent in Q4 2024, reversing the 0.7 per cent decline observed in the preceding quarter (Chart 1).

The non-landed segment, which includes condos and apartments, experienced a notable increase of 3.0 per cent in Q4 2024, compared to a modest 0.1 per cent gain in Q3 2024. In contrast, the prices of landed properties fell by 0.1 per cent in Q4 2024, a slower decline than the 3.4 per cent drop in the previous quarter.  

Among the sub-markets, prices of non-landed properties increased by 3.3 per cent in the suburbs or Outside Central Region (OCR) after holding steady at zero growth in the previous quarter. Similarly, prices in the city fringe or the Rest of Central Region (RCR) saw an increase of 3.0 per cent in Q4 2024, up from 0.8 per cent in Q3 2024. Prices in the luxury or the Core Central Region (CCR) rebounded by 2.6 per cent in Q4 2024, reversing the 1.1 per cent drop in Q3 2024. (Chart 2). 

However, for the whole of 2024, prices experienced their slowest growth at 3.9 per cent. This represents a decline from the increases of 6.8 per cent in 2023, 8.6 per cent in 2022, and 10.6 per cent in 2021. The last occurrence of such a slow growth was in 2020, during which prices rose by 2.2 per cent as a result of the pandemic.

In the suburban OCR, the average price of private homes (excluding EC) increased by 14.0 percent, rising from S$1,662 psf in Q3 2024 to S$1,894 psf in Q4 2024. There was an 11.5 per cent increase in new sale prices, along with a moderate rise of 2.4 per cent and 2.7 per cent in resale and subsale prices respectively during the same period.

1,407 new suburban condos (excluding ECs) were sold last quarter. 1,324 units, or 94.1 per cent, were transacted at higher price tags of above S$2,000 psf, which is the highest proportion to date. The remaining units were sold for at least $1,500 psf but below S$2,000 psf. No private condos, excluding EC, were sold for less than S$1,500 psf in OCR since Q2 2023.

The substantial increase in new home sales in the city fringe can be attributed to several new project launches, including Emerald of Katong (846 total units in the project), Nava Grove (552 units), Union Square Residences (366 units) and Meyer Blue (226 units). These large and mid-scale projects led to a significant rise in new home sales within the RCR segment. Of these projects, Emerald of Katong emerged as the best-selling new project in 2024 (Table 2).

The high new sales volume recorded in RCR is considerable, given that the homes were sold at a new benchmark price within RCR. Based on data from URA Realis, the average transacted price of new condos in the city fringe hit S$2,670 psf in the fourth quarter of 2024, which marks the highest price per square foot since 1995, when such pricing data first became available. This represents a 7 per cent increase from the S$2,496 psf recorded during the same quarter in the previous year.

Comparatively, the average price of new condos in CCR dipped 5.9 per cent from S$3,154 psf in Q4 2023 to S$2,967 psf in Q4 2024. As a result, the price gap between new condos in CCR and RCR narrowed by 15.3 percentage points from 26.4 per cent in Q4 2023 to 11.1 per cent in Q4 2024 (Chart 7). The price gap in Q4 2024 is the lowest recorded since Q1 2013, at 4.8 per cent. The narrowing price gap indicates that more buyers recognize the value of city fringe homes and are increasingly willing to pay higher prices to live in this region.  

Outlook

Looking ahead, we expect private home prices to increase at a faster rate of 4 to 7 per cent in 2025, primarily driven by more project launches and a faster resale price growth due to a tighter supply of completed homes.

Many new projects are expected to be launched this year. Seven large-scale projects, each exceeding 500 units, may be released for sale, which will boost sales activities significantly. This is an increase from four large-scale projects launched in 2024 and six in 2023. Further, there will be five mid-sized project launches, with units ranging from 200 to 500. Therefore, new home transactions may rise from 6,469 units in 2024 to around 7,000 to 9,000 units in 2025.

Conversely, the number of private home completions or homes obtaining Temporary Occupation Permit (TOP) will dwindle further in 2025. The tight supply will likely drive resale prices higher, especially in the suburbs where demand may outstrip supply. As a result, resale volume might decrease from 14,053 units in 2024 to between 10,000 and 12,000 units in 2025. A total of around 18,000 to 22,000 private homes, excluding EC, could be sold this year.