Introduction
At first glance, the Singapore private housing market appears to be in the pink of health with a record sale of 2,557 private residential property units by real estate developers in November. Property developers also sold 344 Executive Condominum (EC) units last month, bringing the total sales to 2,891 housing units.
The sales volume in November 2024 was the highest monthly primary residential sales since March 2013, when developers slld 2,793 private housing units and 279 EC units then.
However, an analysis of the market trends reveal some weaknesses of the current state of the private housing market.
Not a bed of roses
Firstly, the transaction volume in the private residential property market sales is becoming
overly dependent on new project launches. When there were no major residential project
launched in a certain month, such as in February, May, June and August this year, the
primary market sales languished to fewer than 300 units sold in the month. This is despite
the ample supply of unsold private housing units in residential developments that were
already launched, which numbered between 3,500 and 4,000 units in any given month in
2024. This shows that housing demand is not universally robust as homebuyers are cherry-
picking housing units.
Secondly, the overall take-up rate of private housing and EC in November at 85.7% is the
second poorest in 2024. The lowest take-up rate this year was in January 2024 at 65.8%.
The take-up rate measures the primary residential demand relative to the supply. It is the
ratio of the number of units sold to the number of units launched in a given month.
The overall take-up rate in the first ten months of this year was 105.7%. With a take-up rate
of 85.7% in November, the housing demand could arguably be described as sub-par.
Outsized role by new residential launches
The surge in private housing sales in November 2024 was largely driven by the launch of six
new residential projects, which collectively injected 3,335 new units into the market. These
six residential launches accounted for a significant 82.8% of all the housing units sold
islandwide last month, illustrating the outsized role that new residential launches play in the
primary housing market.
Table 1: New residential launches in November 2024
Project Name | Market Segment | Total Number of Units in Project | Units Sold in the Month | Median Unit Price ($ PSF) in the Month |
The collective at One Sophia | CCR | 367 | 62 | $2,732 |
Chuan Park | OCR | 916 | 721 | $2,586 |
Novo Place (EC) | OCR | 504 | 289 | $1,654 |
Emerald of Katong | RCR | 846 | 840 | $2,627 |
Nava Grove | RCR | 552 | 382 | $2,445 |
Union Square Residences | RCR | 366 | 101 | $3,166 |
Source: Mogul.sg Research, URA
The six new residential launches in November enjoyed strong demand among homebuyers with an average sale of 72% of the number of units released. Some of these new launches also set new record prices for their respective neighbourhoods.
Residential sales in the different market segments
Across the island, a total of 2,891 private residential and EC units were sold by developers in November 2024. The city fringe private residential market enjoyed the most robust demand with 54.3% of the total primary housing units sold transacted in this market segment, while the suburban Outside Central Region (OCR) stood at second place with 42.3% of the units sold in the mass-market segment. The prime Core Central Region (CCR) only accounted for 3.4% of the new property sales last month.
Market outlook: Heightened policy risk
The jump in developers’ sales last month has increased the risk of further government intervention to cool property demand with another round of property cooling measures.
The number of housing units sold last month was the highest since March 2013. Three months after the spike in sales in March 2013, the government introduced the Total Debt Servicing Ratio (TDSR), which is arguably one of the most effective tools to curb demand for all types of real estate. As a result, residential property sales declined from the peak in 2013, and housing prices suffered a prolonged contraction for the subsequent four years until they bottomed in 2017.
There are several residential projects slated to be launched in 2025. Some of these projects are well-located near MRT stations or town centres. As a result, the developers are likely to launch them at prices that are significantly higher than the surrounding resale properties, which could accelerate property price growth.
If these upcoming launches contribute to an exuberance of a surge in housing prices and sales next year, it would not be surprising for the authorities to intervene in the property market with stricter property curbs.
Â
Housing demand and price outlook
The primary housing market has quiet down again in December with an absence of new residential launches as many decision makers take a break during the year-end holidays.
The November spike in housing sales is a shot in the arm for the private residential property market. If the sales momentum is not derailed, the private residential primary market could chalk up an estimated 6,700 to 6,800 private homes (excluding EC) sold this year, which will surpass the 6,421 units that developers sold in 2023.
The surge in housing sales in the fourth quarter would also contribute to a moderately faster price appreciation in the 4Q 2024, resulting in a 3% to 4% rise in the private housing price index for the whole of 2024.
Comments