Prime resale homes draw interest amid an absence of new project launches

• Market cooling measures and high interest rates curbed overall buying demand for Prime homes. New home sales also fell on the lack of new launches while resale deals were capped by price gaps between buyers and sellers despite growing interest.
• In the absence of new project launches, buyers turned to previously launched projects. The popular ongoing projects in Q3 2024 were 19 Nassim, Watten House, and Klimt Cairnhill. However, overall new sales transaction volume remained modest.

Prime home vacancy rates inch up as new completions rise

• Four Prime non-landed projects obtained Temporary Occupation Permits (TOPs) in Q3 2024. Three more projects could complete in the quarter. However, pending government review, their TOP issuance could be delayed.
• Prime home vacancy increased q-o-q as new project completions surged, outpacing the rate of physical occupancy. This reflects the typical lag between unit delivery and resident move-ins.

Prime home prices and rents rebound in Q3 2024

• Prime non-landed home prices turned around in Q3 2024 after slipping for three quarters. The price rise was supported by demand from local buyers while foreign purchasers and investors remained deterred by the high Additional Buyer’s Stamp Duty (ABSD).
• Prime non-landed home rents rebounded in Q3 2024 after four quarters of fall. This suggests that rents may have bottomed with improved leasing demand from expatriates, foreign students and occupiers drawn by lower rents.

Outlook: Local demand sustains Prime home prices while leasing outlook improves

• Demand from local buyers seeking a Prime home address amid easing financing costs should sustain prices in the short term. However, the April 2023 ABSD hike should contunue to keep investors and foreign buyers sidelined.
• We expect Prime leasing market conditions to improve over the coming quarters, driven by the anticipated economic growth and increased business hiring activities.