AT A GLANCE
- Market sentiment has turned positive as at end-2024, in view of easing interest rates, improving economic outlook, and healthy end-user demand. Both private and public housing markets are expected to remain resilient in 2025, with upside potential in sales volumes and pricing.
- PropNex expects developers’ sales to come in at 8,000 to 9,000 units (ex. EC) in 2025, while overall private home prices may climb by 3% to 4% for the full year. Meanwhile, HDB resale flat prices are projected to rise by 5% to 7%, supported by a healthy resale volume of 29,000 to 30,000 units in 2025.
- In the residential leasing market, private home rentals may face some pressure amid fresh completions coming on stream in 2025, and resistance among tenants in paying higher rents after the strong rental growth from 2021 to 2023. Private home rentals have moderated in 2024, and could see marginal growth in 2025.
- Encouraged by the uptick in sales, developers may have a keener appetite for site acquisition to shore up land inventory via public land tenders and perhaps the collective sale market, should suitable opportunities arise.
FORGING AHEAD WITH CONFIDENCE
Market conditions have improved substantially towards the end of 2024, where outsized rate cuts by the US Federal Reserve injected confidence so craved for by the market, and helped to boost home sales in a year of two halves, where buying sentiment had been tentative for most part.
Enthusiasm for well-located new private homes among prospective buyers and investors started to return, following the Fed rate cuts (0.5%pt in Sep, and 0.25%pt in Nov), and as developers launched more projects – an unprecedented 3,551 new units from six projects (including executive condos) were put up for sale over a period of less than two weeks in November. Collectively, they saw about 2,000 new private homes and 286 new EC units sold at their respective launches. Prior to the deluge of launches in November, several projects that came on from July 2024 had achieved a launch take-up rate of at least 50%, while Norwood Grand in Woodlands sold 84% of its units at launch.
Meanwhile, the activity in the resale private homes market gained traction after Q1 2024, with resale transactions accounting for more than 70% of the total private residential property transactions for two straight quarters in Q2 and Q3 2024. In the first 11 months of 2024 (11M 2024), more than 12,000 landed and non-landed private homes were resold – surpassing the 11,329 units shifted in the whole of 2023. Limited new launches and the substantial price gap between new and resale properties likely helped to spur the resale market.
The sluggish new home sales for most part of 2024, and high interest rates also led housing developers to be more circumspect in land acquisition. During the year, government land sales tenders attracted fewer bids, with bid prices mostly leaning on the conservative side. Also unprecedented, the Urban Redevelopment Authority (URA) had decided not to award the tender for three plots – Marina Gardens Crescent, Jurong Lake District master developer site, and Media Circle (SA2) – as the respective top bids were assessed to be too low. Meanwhile, a site in Upper Thomson Road (Parcel A) which has a long-stay serviced apartment (SA2) component drew no bids.
With a pick-up in new home sales, and the sales momentum likely to carry into 2025, developers’ appetite for residential sites could grow as they seek to replenish their land inventory. PropNex expects developers to continue to tap the GLS programmes for land, but they may dip into the en bloc market should an attractive plot that is realistically-priced become available. Well-located collective sale sites that are medium-sized, with strong redevelopment potential, and are priced at around $300 million to $500 million may interest developers.
Over in the HDB resale market, prices and resale volume continued to strengthen in the course of the year, supported by healthy demand for resale HDB flats and firm pricing for choice units. Since HDB upgraders are a key feeder market for private housing demand, the resilient resale flat prices may enhance household’s liquidity position, freeing up capital upon resale, that can be re-channeled to a private home purchase. In August 2024, the government cut the loan-to-value (LTV) limit for loans granted by the HDB from 80% to 75% in a bid to cool the resale flat market. PropNex does not expect the measure to significantly impact the resale flat demand, and prices could continue to see a gradual upward creep in 2025.
Meanwhile, the number of HDB flats resold for at least $1 million hit record high, yet again. In the first 11 months of 2024, there were 940 such transactions – already doubling the previous record of 469 units sold in 2023. As a proportion of total resale transactions, the number of million-dollar flats remains small, at around 3.7%.
OUTLOOK
PropNex expects both the private and public housing markets to remain resilient in 2025, with upside potential in demand and pricing. PropNex projects that private home prices could rise by 3% to 4% in 2025, while new private home sales may hover at 8,000 to 9,000 units (ex. EC), and resale private home transactions could range from 14,000 to 15,000 units. For HDB resale flats, there may be 29,000 to 30,000 units resold in 2025, and PropNex anticipates that HDB resale prices could potentially climb by 5% to 7% for the full year.
The factors that will support the residential property market in 2025 include possibly further easing in interest rates if the US Fed is able to stay on the rate cut path after President-elect Donald Trump assumes office in 2025. Meanwhile, the tight labour market in Singapore, healthy household balance sheet, strong Singdollar, and a positive economic outlook will also be supportive of home ownership and sales.
In October 2024, the Monetary Authority of Singapore said it expects GDP to come in at the upper end of the 2% to 3% forecast range in 2024, and 2025. It added that growth in both years is expected to be underpinned by the trade-related and modern services clusters
PropNex believes that the existing slate of cooling measures remain adequate in fostering a sustainable property market in Singapore. Observations from various sales launches indicate that home buyers generally take a long-term view to their property purchase, and do exercise prudence when it comes to home financing – with some young buyers getting financial help from their parents. Buyers continue to be very selective, preferring well-situated projects in the city fringe and suburban areas.
Price Projections 2025
Sales Projections 2025
In focus: Private Residential Property Market
- New home sales were relatively tepid for much of 2024, amidst high interest rates, limited launches in the first nine months of the year, and a general lack of impetus for buyers to act. Developers sold 3,049 new homes (ex. EC) in the first nine months of 2024, before a bumper crop of new launches in Q4 – particularly in November – turbocharged the primary market. The fresh supply in desirable areas, along with the Fed rate cuts have lifted sentiment and buoyed sales.
- More than 3,200 new private homes (see Chart1) were sold in October and November, pushing sales in 11M 2024 toto 6,256 units (ex. EC). In 2024, developers’ sales should outperform 2023 (6,421 units), possibly coming close to 7,000 new units. Barring any unforeseen circumstances, PropNex expects developers to sell 8,000 to 9,000 new homes in 2025 in view of an ample pipeline of launches and more optimism in the market.
Chart 1: New home sales and private resale transaction volume (ex. EC)
Source: PropNex Research, URA, URA Realis (Q4 2024 data up to 24 Nov 2024)
Table 1: Top 5 best-selling projects in 2024* by number of new homes sold
Source: PropNex Research, URA Realis (data up to 24 Nov 2024)
- Among the best-selling new projects in 2024, were fresh launches Chuan Park in Lorong Chuan which sold over 700 units in November, as well as Emerald of Katong at Jalan Tembusu which sold a whopping 825 units in the same month (see Table 1). Of note, Chuan Park has set a new benchmark launch price for a new launch project in the Outside Central Region (OCR).
- The key sales drivers in Q4 2024 included easing interest rates, a spike in the number of new launches (several of which are located near to an MRT station), and pent-up demand for private housing in areas where there have been limited new projects for many years (e.g. in Champions Way, and Lorong Chuan). The strong demand has not been homogenous, with buyers generally picking up new homes in the OCR and Rest of Central Region (RCR). Meanwhile, the Core Central Region (CCR) continues to feel the impact of the hike in additional buyer’s stamp duty (ABSD) rates in April 2023.
- Based on PropNex’s estimates, 16 projects (including EC) with more than 7,680 residential units could potentially hit the market in IH 2025 (see Table 2).
Table 2: Estimated new project launch pipeline in 1H 2025
Source: PropNex Research, PropNex International (as at 17 December 2024), subject to change without prior notice
- The private residential resale market was another bright spot in 2024 where the resale volume outperformed the 11,329 units transacted in 2023. The secondary market is expected to keep up with its performance, and PropNex expects 14,000 to 15,000 resale homes to be sold in 2025. The wide price gap between new sales and resale homes, as well as a preference for larger homes have helped to support the secondary market. Based on URA Realis caveat data (till 24 November 2024), the average unit price gap for new non-landed and resale non-landed homes stood at 45% in 2024.
- Over in the EC segment, sales in 2024 were largely boosted by two new launches – Lumina Grand and Novo Place which hit the market in January and November, respectively. The two EC projects collectively sold 735 EC units, accounting for about 72% of the 1,016 units transacted in 1IM 2024 (till 24 November). Thanks to the new launches, EC sales have already exceeded the 737 units shifted in the entire 2023. The average transacted price of new ECs stood at $1,514 psf in 1IM 2024, and could creep higher to above $1,600 psf in 2025, given the high land cost. Still, with the bump-up in OCR launch prices, new EC units could look very attractive to eligible buyers.
- Private landed homes witnessed higher sales volume in 2024, with nearly 1,700 deals done in 11M 2024, compared with 1,510 transactions in the entire 2023. The increase was mainly driven by stronger sales of semi-detached houses and terrace houses. Over 1IM 2024, the average transacted unit prices on land area of detached houses, semi-detached houses, and terrace houses were $1,708 psf, $1,724 psf and $1,860 psf, respectively. These prices were higher than those posted in full-year 2023, rising by a range of about 1% to 6% across the three segments.
Table 3: Top 5 landed home transactions in 2024 by pricе
Source: PropNex Research, URA Realis (data up to 24 Nov 2024)
- PropNex also noted a gradual pick-up in Good-Class Bungalow (GCB) deals in 2024, with 22 GCB deals worth $609 million being done in 1IM 2024 compared with 18 GCB deals worth about $433 million transacted in 2023 Amongst the top five caveated landed home transactions in 1IM 2024 (see Table 3), the top deal was for a freehold GCB in Cluny Hill that fetched $52 million in July, reflecting a unit price of $3,434 psf on land area.
- Overall PropNex expects private home prices to see a slight upside in 2025, potentially rising by 3% to 4% for the full year – in line with a multi-year trend of moderating price growth, following the 10.6% price jump in 2021. Factors that will put upward pressure on selling prices in the new year include the high land cost, rising construction costs, and the rules on the harmonisation of gross floor area definitions, which tend to result in higher $PSF pricing.
- In Q4 2024, the average unit prices of private non-landed homes rose across all segments, with the exception of CCR which continues to feel the bite of the ABSD hike and limited launches (see Chart 2). Of note, the other segments, RCR, OCR, and EC that saw price growth, all achieved record average unit price in Q4 2024 at $2,672 psf, $2,382 psf, and $1,616 psf, respectively.
- By and large, buyers will continue to be price conscious and selective of their property purchase, focusing on well-located projects near amenities and the MRT station, as well as with a manageable price quantum. In 1IM 2024, 85.3% of the new non-landed private homes sold were priced at below $3 million – a touch higher than the 82.1% proportion in 2023 (see Chart 3). Generally, PropNex expects the pricing sweet-spot for many home buyers should hover at around $1.5 million to $2.3 million.
Chart 2: Average non-landed PSF price for new sale in CCR, RCR, OCR, and EC
Source: PropNex Research, URA Realis (data up to 24 Nov 2024)
Chart 3: Proportion of non-landed private new home sales (ex. EC) by price range
Snapshot:
ABSD curtailed foreign investment demand
- Foreign buying demand was largely subdued in 2024, owing to the punitive cooling 60% ABSD rates on residential property purchase in Singapore by foreigners (non-permanent residents).
- Based on URA caveat data (till 24 November 2024), only 1.5% of new non-landed private sales (ex. EC) were by foreigners (NPR) in 2024, compared with 5% in 2023, and 7.1% in 2022. In absolute numbers, there were 90 non-landed new private home transactions by foreigners in 11M 2024.
- Market observations suggest that few foreigners are willing to pay the hefty ABSD levy, especially for pricier residential properties. Many of the foreign buyers (NPR) who have entered the market herald from the five countries that enjoy ABSD remission under Free Trade Agreements (FTAs) with Singapore. Under the respective FTAs, nationals or PR of Iceland, Liechtenstein, Norway or Switzerland, and nationals of the US, will be accorded the same stamp duty treatment as Singapore citizens.
- Of the 90 transactions purchased by foreigners, 31 of these were bought by foreigners who are exempted from paying ABSD. Amongst the 31 transactions, 29 deals were bought by buyers originating from the US.
In focus: HDB resale market
- The HDB resale volume gained traction over the first three quarters of the year. The resale volume of 8,142 flats in Q3 2024 is the highest quarterly sales in three years, while HDB resale transactions exceeded 7,000 flats in each of the first two quarters of 2024. Including sales in October anp November, there were more than 26,600 flats resold in IIM 2024 (see Chart 4) – on track to outdo the 26,735 units transacted in 2023. Meanwhile, some 29,000 to 30,000 resale flats may be sold in 2025, as per PropNex’s forecast.
- Resilient demand for resale flats helped to bolster the HDB resale market, where prices strengthened in the first three quarters of 2024. Cumulatively, HDB resale prices grew by 6.9% in 9M 2024, substantially stronger than the 3.8% increase over the corresponding period in 2023, according to the HDB resale price index. Going by prevailing trend, HDB resale prices mayjump by 8% to 9% in 2024 – rebounding from two years of slower growth (2023: 4.9%; 2022: 10.4%) after resale flat prices shot up by 12.7% in 2021. With demand likely to hold firm, PropNex expects HDB resale prices could climb by between 5% and 7% in 2025.
- The HDB price growth this year may be attributed to buying demand outpacing the resale stock available – with fewer HDB flats reaching the 5-year minimum occupation period (MOP) – as well as sellers generally holding on to their asking price, particularly for choice units. In addition, there was also a record number of resale flats transacted for at least $1 million.
- In 11M 2024, there were 940 units of million-dollar resale flats (see Chart 5), smashing the record 469 units that changed hands in the entire 2023. About 9% of the million-dollar HDB flats transacted in 1IM 2024 came from recently-MOPed projects such as Alkaff Vista in Bidadari (Toa Payoh) and St. George’s Towers (Kallang Whampoa). Overall, the 940 flats accounted for about 3.7% of the total HDB resale transactions during the period. According to HDB sales data, the priciest resale flats sold in 1IM 2024 and on record were two 5-room flats in Bukit Merah – one in Boon Tiong Road (Tiong Bahru View) and the other, Henderson Road (City Vue @ Henderson) – which fetched $1.588 million each (see Table 4). A 5-room flat in Margaret Drive was reportedly sold for about $1.73 million in July. The deal which was reported in the media was not listed in the HDB transaction data.
- In August 2024, the government implemented a 5-percentage-point reduction in the loan-to-value (LTV) limit for home loans granted by the HDB from 80% to 75% to tame rising resale flat prices. This is expected to affect a small group of buyers and PropNex does not anticipate any significant impact on the resale flat market on the whole.
- Analysing the transactions by flat type and town, PropNex notes that the average resale price of 2-to 5-room flats and executive flats across mature and non-mature towns all rose in Q3 2024 from Q2 2024 (see Table 5). The segment that saw the highest QOQ price growth in Q3 2024 was 3-room flats in non-mature estates, and 4-room flats in mature towns – both increased by 4% QOQ each.
- Based on completion status of HDB projects, PropNex estimates that 7,454 HDB flats (see Chart 6) could potentially exit their respective 5-year MOP in 2025, with Bukit Batok, Punggol, Tampines, and Toa Payoh accounting for about 68% of the total. With fewer flats slated to attain their MOP in 2025, this could impact the resale stock available on the market, which may potentially support price growth against a backdrop of healthy demand for resale flats.
- PropNex believes the robust demand for HDB’s build-to-order (BTO) flats may be beneficial for the resale flats market in that many of the applicants who fail to secure a BTO flat could opt for HDB resale units instead. Although the HDB has put out BTO projects with shorter waiting time of less than 3 years in October 2024, a number of them still have relatively longer waiting time of between 3 and 5 years. Buyers who cannot wait will certainly be looking at more immediately accessible options such as resale flats. In addition, with mass market private home prices staying firm, it is likely that some end-users may go for more affordable HDB resale flats in the same area.
Chart 7: URA Private Residential Rental Index and rental contract volume (ex. EC)
In focus: Residential Leasing Market
- In the private home leasing market, rentals ticked up by 0.8% QOQ in Q3 2024, snapping three quarters of decline a sign that rentals could be starting to stabilise. In the first nine months of 2024, rentals fell by 1.9% compared with the 11.1% growth in the corresponding period in 2023.
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The more measured movement in rents could have appealed to some tenants, as the number of private home rental contracts rose to 26,006 transactions in Q3 2024 compared with 20,676 contracts in Q2 2024. Overall, an estimated 73,165 private home rental contracts were inked in the first 10 months of 2024 and it looks likely that the total private home rental volume in 2024 could surpass that of 2023, where 82,268 rental deals were done (see Chart 7).
Table 6: Average monthly rents for HDB flats and non-landed private homes by type and unit size
Source: PropNex Research, Data.gov.sg, URA Realis
- According to the URA, 3,953 new private homes (including EC) were completed in Q3 2024, and 3,727 units are expected to be ready in Q4 2024. Meanwhile, 6,603 units (incl. EC) are slated to be completed in 2025. With the steady pipeline of private home completions, tenants will have more options, and the oncoming supply may keep rental growth in check, as landlords and tenants come to a compromise on rental expectations. To this end, PropNex expects private home rentals upside to be limited, with rental growth coming in at possibly 3% to 4% in 2025.
- Meanwhile, more than 30,660 HDB flats were estimated to have been rented out by owners in 10M 2024, and PropNex projects the total HDB flat leasing volume in the full-year 2024 could surpass the 36,854 rental approvals in 2023. Given the rental price difference between HDB flats and private homes, the former will continue to be attractive to renters on a tighter budget (see Table 6 for average rentals comparison).
- Generally, home leasing demand could be supported by various segments: expatriates working in Singapore; international students; locals seeking to rent a larger home; those waiting for their new homes to be completed; private home down-graders waiting out the 15-month period before buying an HDB resale flat; as well as single-person households moving out to live on their own for greater privacy.
- AT A GLANCE:
OPPORTUNITIES AND CHALLENGES IN 2025
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Research
Wong Siew Ying
Head of Research and Content
Jean Choo
Senior Research Analyst
Leeann Chan
Research Analyst
Corporate Communications & Business Development
Fazilla Nordin
Assistant Director
Grethel Kho
Manager
Victoria Koh
Executive
PropNex Realty
(A subsidiary of PropNex Limited)
480 Lorong 6 Toa Payoh #10-01 HDB Hub East Wing Singapore 310480 Main: (65) 6820 8000
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