According to a recent report by OrangeTee Research & Analytics, private resale home prices remained stable in the third quarter of 2024, despite the current high-interest rate environment. Data from the Urban Redevelopment Authority (URA) showed that the average resale prices for landed and non-landed private residential homes, excluding executive condos (ECs), stayed constant at $1,713 psf in the third quarter, compared to the second quarter of the same year. However, there were some fluctuations in the average resale prices within different regions.
In the Core Central Region (CCR), average resale prices saw a 1.6% increase from $2,145 psf in the second quarter to $2,181 psf in the third quarter of 2024. This partially reversed the 3.6% price drop in the first quarter of 2024. Similarly, prices in the Rest of Central Region (RCR) also increased by 1.4% from $1,837 psf to $1,863 psf during the same period, showing a slower growth compared to the 3.1% increase in the previous quarter. On the other hand, the average price of private residential resale homes in the Outside of Central Region (OCR) decreased by 0.4% from $1,495 psf in the second quarter to $1,489 psf in the third quarter of 2024, reversing the 3.5% growth seen in the second quarter.
Despite the high interest rates, there was a robust demand for resale homes, as seen in the increase in volume of transactions. URA recorded 3,860 resale homes sold in the third quarter of 2024, a 1.5% increase from 3,802 units in the second quarter. Resale transactions made up 71.9% of the total 5,372 residential sales, including new sales, resale, and subsale, in the third quarter. However, this was a drop from the record high of 77.4% in the second quarter, according to OrangeTee.
In the first nine months of 2024, there were a total of 10,351 resale homes 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% in the first three quarters of 2023 to 71.3% in the same period in 2024.
According to the report, this growth in demand for resale homes can be attributed to the increase in housing supply in the past two years, with close to 30,000 private homes completed. As the available supply expands, there are more housing options for potential buyers. Moreover, with high prices of new private homes, buyers may turn to the secondary market for more affordable options.
Investing in a condo in Singapore offers numerous advantages, one of which is the potential for capital appreciation. Singapore’s advantageous position as a global business hub and its resilient economic fundamentals create a constant demand for real estate. In recent years, property prices in Singapore have consistently risen, with condos in prime locations experiencing significant appreciation. By entering the market at the right time and retaining their property for an extended period, investors can reap substantial capital gains. The addition of a condo to their investment portfolio can prove to be a wise decision in the long run.
Recent launches in the OCR, such as Norwood Grand and Meyer Blue, have seen strong demand, with units selling at a significant premium compared to the average resale prices in the region. The recent interest rate cuts by the US Federal Reserve may also spur luxury home sales due to the lower cost of borrowing. However, high-net-worth investors who are less sensitive to interest rate fluctuations may not base their property purchase decisions on mortgage rates.
Despite the high interest rates, OrangeTee predicts that resale prices will continue to grow over the next few years due to the projected decrease in available stock. With approximately 5,300 private homes expected to be completed in 2025, there will be a significant decrease compared to the 9,100 units expected to be completed this year. Therefore, barring any major economic crises or unforeseen circumstances, OrangeTee forecasts a positive outlook for resale homeowners.