APPD Market Report Article

Singapore

May 26, 2024

Chia Siew Chuin, Head of Residential Research, Singapore

-6.0%

SGD 5.93

Rents
Falling

Prime new sales volume plummet on lack of new project launches

  • Watten House was publicly released in March following its private preview last November. There were no new Prime project launches in 1Q24. The latest information available showed that 19 Nassim was the top-selling project in the quarter, with 21 units sold at a median price of SGD 3,344 per sq ft, followed by Watten House, which sold 20 units at a median price of SGD 3,245 per sq ft.
  • Buying demand for Prime non-landed homes stayed tepid due to market cooling measures, economic uncertainty and high interest rates, but local resident buyers were willing to pursue buying opportunities. New home sales volume plummeted quarter-on-quarter (q-o-q) with no new launches. The buyer-seller price mismatch also capped resale volume, leading to a drop in overall Prime sales volume.

Smaller-sized project completions lead to a dip in Prime vacancy

  • Based on available information as of end-March, a serviced apartment building along River Valley Road received its Temporary Occupation Permit (TOP). Other Prime non-landed projects completed in 1Q24 were Van Holland (69 units), The Iveria (51 units), Cairnhill 16 (39 units) and 33 Devonshire (21 units). However, subject to government processes, these projects may obtain TOPs at a later date.
  • Homeowners continued to move into their new homes completed in previous quarters. Concurrently, the completion of smaller-sized projects and the withdrawal of two projects from the Prime non-landed residential market during the quarter led to a slight contraction in the Prime vacancy rate q-o-q.

Prime rents continue to decline while prices stay stable

  • Prime prices were relatively stable in 1Q24 following the q-o-q dip in the previous quarter. Foreign buyers and property investors remained discouraged by the high Additional Buyer’s Stamp Duty (ABSD), but local residents continued to see the value in buying homes in the Prime submarket. This helped bolster prices for prime non-landed homes.
  • In 1Q24, Prime non-landed home rents fell for the third straight quarter and at a faster pace due to softer leasing demand and a rise in new completions that expanded the leasing supply. The second property tax hike from 1 January 2024 increased holding costs for landlords, compelling them to lower their asking rents to secure tenants and mitigate additional expenses.

Outlook: High ABSD to keep foreign buyers and investors at bay

  • In the short term, foreign buyers and property investors are likely to remain on the sidelines, while local residents seeking homebuying opportunities are expected to drive buying demand for Prime homes. This should support a gentle price upside.
  • The Prime leasing market is expected to remain subdued in the near term owing to soft leasing demand and ample home supply for lease.

Note: Singapore Residential refers to Singapore's overall prime and luxury residential markets.

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