According to a recent report by OrangeTee Research & Analytics, private resale home prices maintained their stability in the third quarter of 2024, despite the current high interest rate environment. URA records show that the average prices for both landed and non-landed private residential homes, excluding executive condos (ECs), remained unchanged at $1,713 psf from the second quarter to the third quarter of 2024. However, there was some fluctuation in average prices in the Core Central Region (CCR), Rest of Central Region (RCR), and Outside of Central Region (OCR).
In the CCR, average resale prices increased by 1.6% from $2,145 psf in the second quarter to $2,181 psf in the third quarter of 2024. This partially reverses the 3.6% drop in prices from the first quarter to the second quarter of 2024. Similarly, in the RCR, prices rose by 1.4% from $1,837 psf to $1,863 psf during the same period. However, this growth is lower than the 3.1% increase seen in the previous quarter. In contrast, prices in the OCR saw a decline of 0.4% from $1,495 psf to $1,489 psf in the third quarter, a reversal from the 3.5% growth in the second quarter.
Despite these fluctuations, the demand for resale homes remained robust, with a 1.5% increase in the number of units sold in the third quarter of 2024 compared to the previous quarter. This accounted for 71.9% of the total 5,372 residential sales, including new sales, resale, and subscale, in the same period. This is a slight decrease from the record high of 77.4% in the second quarter of 2024, as noted by OrangeTee.
In the first nine months of 2024, 10,351 resale homes were sold, reflecting a 21.8% increase compared to the same period in 2023. This also resulted in an increase in market share, from 57.8% in the first three quarters of 2023 to 71.3% in the same period in 2024. The report attributes this strong demand for resale homes to the significant increase in housing supply in the past two years, with close to 30,000 private homes completed. As more options become available, buyers may turn to the secondary market for more affordable private housing.
The recent interest rate cuts by the US Federal Reserve may also spur luxury home sales due to reduced borrowing costs. However, high-net-worth investors are less likely to base their property purchase decisions on mortgage rates. Nonetheless, the report suggests that buyers who have been hesitant due to high interest rates may now be more inclined to enter the market.
Investing in a condo in Singapore offers numerous benefits, one of which is the potential for capital appreciation. As a global business hub with robust economic foundations, Singapore consistently attracts a high demand for real estate. This has resulted in a steady rise in property prices over the years, especially in prime locations where condos are situated. By entering the market at the opportune moment and holding onto their property for an extended period, investors can experience significant capital gains. With the attractive location and strong market demand, a condo investment in Singapore can offer lucrative returns.
OrangeTee predicts that resale prices will continue to grow over the next few years as there is a projected decrease in available stock. Only 5,300 private homes are expected to be completed in 2025, a significant drop from the 9,100 units expected to be completed this year. Hence, barring any major economic crises or unforeseen circumstances, OrangeTee forecasts positive prospects for resale homeowners.