Singapore home prices accelerate again after new buying wave

Singapore private home prices jumped the most in three quarters, after a resurgence in sales of new apartments.

A price index for private residences rose 1.2% last quarter from three months earlier, according to preliminary estimates released Wednesday by the city’s Urban Redevelopment Authority. That compares with a 1% increase in the second quarter.

The acceleration comes after a renewed rise in presales amid a slew of new projects being released in the market, across the suburban and prime segments near the city centre. Along with a significant decline in local interest rates and developers adjusting strategies to attract buyers, that has driven a new frenzy of buying in the city-state.

The resurgence complicates ongoing government efforts to rein in housing prices, which have made the financial hub’s real estate among the most expensive in the world. Singapore’s government has traditionally relied on macroprudential measures to cool the market, the latest being a hike in the seller’s stamp duty in July — adding to a series of steps taken in recent years. 

Authorities on Wednesday repeated a warning for buyers to exercise prudence as the economy slows and labour demand shows signs of moderating.

“Housing demand has been healthy and this could persist due to lower interest rates,” Bloomberg Intelligence analyst Jun Yang Teh wrote in a note. “Still, price growth might be capped by macroeconomic uncertainty, selective buyers and more launches.” 

Private homes play a significant role in Singapore’s residential market, even though it is largely dominated by government-built public housing. Price movements in both segments are closely intertwined. In recent years, the government has taken steps to cool a record surge in prices of resold public homes, which has raised concerns among residents about housing affordability. 

An index for such flats extended its rise with a 0.4% quarterly gain, according to separate estimates released Wednesday, although it marked the fourth consecutive quarter of slowing growth.

To address housing demand, the government has increased supply by auctioning vacant sites to developers. In 2024 alone, land for 11,110 private homes was released, with plans to launch space for an additional 25,000 units from 2025 to 2027. 

Following a sharp increase in 2023 that raised a tax on most foreign residential purchases to 60%, developers have shifted their focus toward attracting local buyers and affluent immigrants, who benefit from a reduced levy.

One strategy has been to offer smaller homes with more accessible price points. A notable example was a well-received project launched in August, featuring compact 420-square-foot 'shoebox' apartments.

Finalised home prices data will be released on Oct 24.

Source: Bloomberg