As the first quarter of 2025 unfolded, Singapore’s private home prices saw a modest upward trend, increasing by 0.6% compared to the previous quarter. This slight rise follows a more robust 2.3% growth in the last quarter of 2024, indicating a cooling in momentum. Year-on-year, prices have grown by 3.1% when compared to Q1 2024, reflecting how the market has steadily appreciated over time.
Curiously, both landed and non-landed homes recorded the same 0.6% increase during this quarter. Among landed properties, detached houses stood out, experiencing a remarkable price surge of nearly 20%. Landed home prices have clearly made a significant impact, yet the overall market is witnessing a decline in transaction volumes.
Both landed and non-landed homes experienced a 0.6% price increase, with detached houses surging nearly 20%, despite declining transaction volumes.
In fact, there was about a 15% drop in transactions quarter-on-quarter, suggesting that rising prices have made buyers more cautious. Less activity in the second-hand condominium sector particularly contributed to this downturn. Additionally, increased buyer interest in suburban homes reflects a shift in preferences towards more affordable options in the current economic climate.
Suburban areas, however, have become increasingly attractive, as buyers are drawn to the promise of more affordable options. This has led to heightened competition for new developments, with developers enthusiastically acquiring suburban land. Interestingly, price-sensitive buyers are flocking to these markets, perhaps in search of first-time ownership amidst elevated mortgage rates. The introduction of Deferred Payment Schemes could further stimulate market activity by enhancing accessibility to previously unaffordable properties.
Despite the positive price growth seen in early 2025, the development in transaction volume is significantly concerning. A slowdown compared to previous quarters indicates that the enthusiasm may not be as high as before.
Factors like geopolitical tensions, elevated mortgage rates, and predictions of moderating GDP growth add layers of complexity to the housing market. Analysts suggest that some government intervention might even be on the horizon to tackle skyrocketing prices.
