SINGAPORE: Final figures from the Urban Redevelopment Authority (URA) revealed that Singapore home prices rose by 2.3% in the fourth quarter of 2024, matching earlier estimates, amid analyst forecasts of price hikes that could prompt new cooling measures. This brings the total increase for 2024 to 3.9%.
Meanwhile, rents for private homes remained unchanged from the previous quarter, when they rose by 0.8%. This resulted in a 1.9% drop in rents for the year, marking the first decline since 2020.
The rise in home prices was mainly due to a surge in new projects launched towards the end of last year. Lower interest rates also attracted more buyers, boosting new home sales. According to URA data, developers sold 6,469 units in 2024, up slightly from 6,421 in 2023.
Bloomberg reported that the three-month Singapore overnight rate average, the average interest rate banks lend to each other overnight over three months, stood at 2.92% on Friday, the lowest since November 2022. A lower rate means lower borrowing costs for banks, which could lead to lower mortgage rates for homeowners.
With the upcoming national election, housing affordability remains a significant concern among Singaporeans.
Prices of HDB resale flats, where most locals live, rose for the 19th quarter in a row, with a 9.7% increase for the year, the highest since 2022, according to separate data released on Friday.
Strong demand for Singapore’s first two private residential launches this year, including one in the north, where 86% of its 777 units sold during the launch weekend, has further fuelled analysts’ forecasts for potential cooling measures, including those from Morgan Stanley, Barclays, and Citigroup.
Citigroup analyst Brandon Lee noted that the strong sales in January could increase the chances of residential cooling measures. One key moment to watch is Singapore’s annual budget, set to be delivered on Feb 18.
In recent years, Singapore has introduced several curbs to slow the rapid rise in property prices during the pandemic. Last year, home prices grew at their slowest pace since 2020.
However, the impact of increased supply is expected to take time to materialise, keeping prices high. The URA expects 27,300 private units to be completed between 2025 and 2027.
So far, authorities have shown mixed signals on possible further intervention.
National Development Minister Desmond Lee stated earlier this month that the government is “not averse” to new curbs, adding that it is essential to be patient and allow supply and demand measures to take effect. /TISG
Read also: Rental prices for private homes and HDB flats to rise 2% to 4% in 2025 amid shrinking supply
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