Why did the landed property market suddenly shift into high gear during 2025? It appears that while the broader housing sector decided to take a well-deserved breather, landed homes were busy running a marathon at sprint speeds. The annual landed price increase reached a robust 7.7% for the year, a significant leap from the meager 0.9% growth seen in 2024, showing that buyers were effectively making up for lost time. Significant market activity was already evident at the start of the year, as new home sales were recorded at 1,083 units in January 2025.
While the broader sector took a breather, landed homes sprinted ahead, posting a robust 7.7% annual price increase.
This remarkable surge was fueled by a persistent tight supply of available homes and a drastic drop in interest rates, which moderated sharply from 3.02% to a much friendlier 1.19% by year-end. With borrowing costs looking this attractive, high-net-worth individuals flocked to luxury landed assets for capital preservation.
The momentum peaked in the fourth quarter, where prices grew by 3.5%, recording the strongest quarterly growth since late 2023. In contrast, the overall private residential market saw prices gain only 3.4% for the entire year, the slowest pace since 2020, with general Q4 prices edging up a mere 0.7%. This gap in sector performance was stark, as prime district prices declined by 3.2% during the fourth quarter while landed homes continued their ascent.
Landed properties clearly ignored the memo about slowing down, as the Landed Price Index famously surged from 136 to 237.9, marking a staggering 75% increase. Earlier in the third quarter, this segment had already led gains with a 1.41% rise, setting the stage for the year-end rally.
Valuations followed suit, with the average landed price per square foot surpassing the psychological barrier of S$2,000 in the first quarter after rising 3.3%. Although the second quarter saw a moderated gain of 0.7%, the trajectory remained upward.
By the fourth quarter, landed housing posted the steepest price increase of 3.4% quarter-on-quarter, outpacing all other categories. More than half of the transactions in those final months were worth at least $2 million, proving that freehold landed housing continues to serve as a crucial pillar for wealth storage. Many buyers shifted away from trust purchases due to the implementation of the ABSD Trust rate of 35% on all residential property transfers into living trusts.
While the Housing Index reached an all-time high of 216.40 points, it was the landed sector that truly stole the show in 2025.
