According to a new report by OrangeTee Research & Analytics, private resale home prices in 3Q2024 remained stable despite the high-interest rate environment. Data from Urban Redevelopment Authority (URA) showed that the average resale prices for landed and non-landed private residential homes, excluding executive condos (ECs), stayed the same at $1,713 psf from 2Q2024 to 3Q2024. However, there were fluctuations in average resale prices within different regions.
In the Core Central Region (CCR), average resale prices increased by 1.6% from $2,145 psf in 2Q2024 to $2,181 psf in 3Q2024. This partially reversed the 3.6% drop seen in the previous quarter. In the Rest of Central Region (RCR), prices also increased by 1.4% from $1,837 psf to $1,863 psf. This was a moderation from the 3.1% growth seen in the second quarter. On the other hand, average prices in the Outside of Central Region (OCR) decreased by 0.4% from $1,495 psf to $1,489 psf, a change from the 3.5% growth in the previous quarter.
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Despite these fluctuations, there was still robust demand for resale homes, with URA recording 3,860 units sold last quarter, a 1.5% increase from the 3,802 units sold in 2Q2024. Resale transactions made up 71.9% of the total 5,372 residential sales, which includes new sales, resale, and subsale, in 3Q2024. This was a drop from the record high of 77.4% market share in the second quarter, as reported by OrangeTee.
In the first nine months of 2024, 10,351 resale homes were sold, showing a 21.8% increase compared to the same period in 2023. The market share of resale homes also saw a similar increase, growing from 57.8% of residential transactions in the first three quarters of 2023 to 71.3% in the same period this year.
OrangeTee attributes the robust demand for resale homes to the increase in housing supply, with close to 30,000 private homes completed in the past two years. This has provided more options for prospective home buyers. Additionally, with high prices for new private homes, some buyers may turn to the secondary market for more affordable options.
For instance, Norwood Grand, a newly launched condo in the OCR, sold 293 units at an average price of $2,086 psf since its launch in October, marking a 39.5% premium over the average price in the region. Similarly, Meyer Blue, a newly launched RCR project, sold 122 units at an average price of $3,252 psf in the same month, 74.5% higher than the average price of resale units in the RCR.
OrangeTee also predicts that the recent interest rate cuts by the US Federal Reserve may stimulate luxury home sales due to the lower cost of borrowing. However, high-net-worth investors who are less sensitive to interest rate fluctuations are less likely to base their purchasing decisions on mortgage rates. Nevertheless, buyers who may have been more cautious due to high interest rates may now be more willing to enter the market.
Looking ahead, OrangeTee expects resale prices to continue growing, as the supply of available homes is expected to decrease in the coming years. Approximately 5,300 private homes are expected to be completed in 2025, a significant increase from the 9,100 units expected to be completed this year. Therefore, the report predicts positive prospects for resale homeowners, barring any major economic crises or unforeseen circumstances.