Singapore Home Prices Rise for Third Quarter, Defying Slowdown

Daisy Ratnasari

(Bloomberg) — Singapore home prices rose for a third consecutive quarter, as the market dodged a decline despite months of tepid sales.

Private residential prices climbed 1.5% in the first quarter compared with the prior three months, according to preliminary estimates released Monday by the Urban Redevelopment Authority. That is slower than the 2.8% rise recorded in the fourth quarter of 2023.

The financial hub has so far dodged the worst of the property downturn sweeping the globe. Local demand has buoyed the city’s real estate, despite high interest rates and a spate of government curbs in recent years to cool the market. 

Read more: Singapore 1Q Private Residential Prices Rise 1.5%

But there are growing strains in particular segments like the luxury apartment space, which has been pummeled by a 60% stamp duty imposed on foreigner purchases last year. That’s led to developers struggling to sell units, and having to offer discounts on their projects in some instances.

Domestic mortgage rates are expected to remain at levels that are elevated relative to the low levels seen over the past decade, the URA said.

Authorities are also grappling with voter concerns about housing affordability. In its annual budget in February, the government refrained from introducing major demand-inducing measures, unlike other rival hubs such as Hong Kong. 

Still, local demand for suburban private homes has kept prices afloat. Lentor Mansion, a condominium project in the island’s north, managed to sell about 75% of its 533 units when it launched in mid-March. 

Such high take-ups though are likely one-offs, wrote Citigroup Inc. analyst Brandon Lee in a March note, as a “flood of supply” of about 47 residential projects this year weighs on buying sentiment. Morgan Stanley predicts a 3% drop in private home prices this year.

Finalized price changes will be released by the URA on April 26. 

©2024 Bloomberg L.P.

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