Signs of Recovery in Singapore’s Prime Residential Market
The high-end residential market in Singapore has been under pressure over the past year, impacted by both economic uncertainties and stricter cooling measures. When additional buyer’s stamp duty (ABSD) rates increased in April 2023, sales of non-landed private homes in the Core Central Region (CCR)—encompassing Districts 9, 10, 11, Sentosa, and the Downtown Core—slowed, especially as some developers postponed new launches.
According to URA Realis data, only 248 new non-landed private homes were sold in the CCR from January to September 2024, on track to one of the lowest records since the Asian financial crisis in 1998. However, there is cautious optimism that conditions could improve, supported by new launches, potential rate cuts, and stabilizing prices.
Stability in Prices Boosts Confidence
CCR property prices have held steady, with moderate growth even amid cooling measures. According to the Urban Redevelopment Authority’s property price index, CCR prices increased by 3.8% in 2021, 4.8% in 2022, and 1.9% in 2023, continuing with another 1.9% rise in the first nine months of 2024. Median unit prices for both new and resale CCR properties reached record highs in 2024, at S$3,246 per square foot for new units and S$2,103 for resale, reflecting confidence in this prime market.
Price Growth Gap Narrows Between Prime and Other Regions
CCR price growth has lagged behind that in the Rest of Central Region (RCR) and Outside Central Region (OCR) since 2020. Prices of CCR non-landed homes rose by 15.1% from Q1 2020 to Q3 2024, compared to a 42.2% rise in the RCR and a 40.6% increase in the OCR. This has narrowed the price gap, creating a more appealing entry point for buyers. Secondary market sales have also shown resilience, with resale transactions likely to surpass 2023 numbers, possibly due to fewer new launches pushing buyers towards the resale market.
Positive Market Conditions Ahead
A recent rate cut by the US Federal Reserve and hints of further cuts have improved market confidence, easing borrowing costs and potentially drawing more interest into the property market. Singapore’s favorable investment landscape—with a stable currency, robust economic outlook, strong labor market, and political stability—continues to attract buyers, both local and foreign.
As of October 2024, about 930 units remain available in the CCR, including completed projects like Cape Royale, The Residences at W Sentosa Cove, and Cuscaden Reserve, as well as active launches like One Bernam and Midtown Bay. CCR projects in the pipeline, including the 246-unit Newport Residences and the 683-unit W Residences Singapore – Marina View, promise additional buying opportunities.
Strong Local Demand Supports Market Resilience
Since the ABSD hike, Singaporeans and permanent residents have dominated CCR sales, accounting for 76% and 19% of transactions, respectively. Singaporean buyers in particular are a steady demand base, with most purchases under S$3 million. Growing regional wealth and the US Federal Reserve rate cut cycle are likely to further support the market recovery in 2025.
With a promising pipeline of new developments and favorable economic indicators, the CCR market appears poised for renewed activity in 2025, providing opportunities for buyers and investors alike.
