Press Release
26 Jul 2024
URA has just released the Q2 2024 real estate statistics.
https://www.ura.gov.sg/Corporate/Media-Room/Media-Releases/pr24-38
Prices
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. 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.
Volume
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. This sales increase was driven by the secondary market, where resale transactions surged 41.4 per cent from 2,689 units in Q1 2024 to 3,802 units in Q2 2024.
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. For the first half of 1H2024, new home sales volume dropped to an all-time low of 1,889 units.
The steep decline in sales can be attributed to the record-low number of homes being launched. Only 1,938 units excluding EC were released for sale in 1H2024, compared to the previous low of 2,080 units in 1H 2004. When there are fewer new homes available for purchase, the number of home sales typically decreases as well.
Rental
The private rental market has seen a sustained decline in rental prices. According to the Urban Redevelopment Authority (URA)’s rental index, overall rents decreased for a third consecutive quarter, slipping by 0.8 per cent in Q2 2024. This extends the previous rental declines of 1.9 per cent in Q1 2024 and 2.1 per cent in Q4 2023.
For the first half of 2024, overall rents dipped by -2.7 per cent, which is in stark contrast to the strong growth in 1H2023 at 10.2 per cent and in 1H2022 at 11.2 per cent.
A higher supply of private properties has weighed down rents, as almost 30,000 homes were completed in 2022 and 2023. A sharp contraction in domestic demand further aggravated the situation, with many locals leaving the leasing market having transitioned into their permanent homes. In addition, the departure of some expatriates has made the market challenges even more pronounced, as some multinational corporations, tech firms, start-ups, and financial institutions have been restructuring over the past two years.
The rental market may be turning a corner as rents have declined at a slower rate over the past quarters. Rental demand may pick up as some private rents are becoming more attractive, drawing tenants back to private rentals from public housing. We expect rents to decrease by 3 to 5 per cent in 2024, in contrast to the 8.7 per cent increase in 2023 and the 29.7 per cent rise in 2022.
Outlook
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 may 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 will likely continue to 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 a range of 3 - 6 per cent to 4.5 - 5.5 per cent.
Demand for resale homes will likely stay robust, with sales volume for the entire year potentially matching last year's levels. We anticipate a moderate 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 in 2024 may still be lower than previous years, estimated to be between 5,000 and 6,200 units, due to the low number of new launches this year.