Huttons’ comments on URA 3Q 2024’s flash estimates

Property prices declined by 1.1% in 3Q 2024, dragged down by a large fall of 3.8% in landed home prices and a 1.5% decrease in prices of non-landed properties in the CCR. Overall prices have increased by 1.1% in 9M 2024.

The drop in prices in the CCR was not unexpected as buying demand in the CCR was still constrained by the 60% ABSD on foreigners. Prices were stable in the RCR and OCR, supported by robust demand from HDB upgraders.

Private Homes Launch and Sales
The new homes property market shifted into higher gear in 3Q 2024.

Stronger economic growth in the past few months may have injected confidence to buyers. Together with more larger project launches in 3Q 2024, the volume of transactions has increased.

The much-anticipated cut in interest rate in Sept 2024 may have also persuaded more buyers to enter the market earlier before higher potential demand in the next few months pushed up prices.

Huttons Data Analytics estimate developers launched between 1,200 and 1,300 private residential units in 3Q 2024.

This is about double of 2Q 2024’s 634 launched units but less than half of the 2,805 units launched a year ago.

There were three major non-landed launches in 3Q 2024 –Sora, Kassia and 8@BT.

Sora, the largest new launch in Jurong Lake District, sold 102 units on launch weekend. Kassia, the last freehold project in the Flora Drive private residential enclave sold 145 units, a take-up of 52.5% on launch weekend. The positive momentum carried forward to 8@BT which sold 53.2% or 84 units on launch weekend.

The strong take up of more than 50% for the past two projects may indicate strengthening buyers’ sentiments in the market.

New sales in 3Q 2024 are likely to be between 1,100 and 1,200. This is much higher than 2Q 2024’s 725 units and on par with 1Q 2024’s 1,164 units.

Figure 1: Developer’s New Sales Volume

Source: URA, Huttons Data Analytics as of 1 Oct 2024

Including ECs
The estimated number of unsold EC units is around 180 as of end-Sept 2024. This is the lowest level since 1Q 2022.

With depleting unsold EC units, developers are estimated to have sold 84 new EC units, 42.1% lower than 2Q 2024’s 145 units.

New ECs will continue to see steady demand due to its attractive entry price, availability of a deferred payment scheme to eligible buyers and upfront remission of ABSD for HDB upgraders.

As the next EC project, Novo Place is estimated to be in Nov 2024, options are running low for buyers.

Purchasers’ Profile
Singaporeans and Permanent Residents made up 98.4% of purchases of private residential properties while foreigners made up 1.2% in 3Q 2024.

The proportion of Singaporeans buying private residential properties has been on the rise since the cooling measure in Apr 2023 which raised ABSD to 60% for foreigners.

An estimated 82.8% of purchases are by Singaporeans in 3Q 2024 compared to 74.0% in 1Q 2023. This could be due to more naturalised Singaporeans after the Government slapped a 60% ABSD on foreigners. It is effective in keeping the number of purchases by foreigners low yet encourages higher quality talents to become Singaporeans.

The bulk of buyers have a budget below $2 million in 3Q 2024.

Table 2: Comparison of Price Range and Residential Status (All Sale Types) in 3Q 2024

Source: URA, Huttons Data Analytics as of 1 Oct 2024

Outlook
Some of the confirmed project launches in 4Q 2024 include Emerald of Katong, Nava Grove, Norwood Grand, Novo Place (EC) and The Chuan Park.

Emerald of Katong will be the largest new launch in District 15 (Katong) and is a short 5 mins’ walk to Tanjong Katong MRT station.

There has not been a launch in more than ten years in the vicinity of Norwood Grand and The Chuan Park. There may be potential pentup demand. Both Norwood Grand and The Chuan Park are within a short walk to the Woodlands South and Lorong Chuan MRT stations, respectively.

Nava Grove will be the largest project in the Holland (Pine Grove) area. It is nestled in a tranquil private residential enclave in the highly coveted Mount Sinai landed area and offers panoramic views of the surrounding lush greenery, Bukit Timah Nature Reserve to the North and the city skyline to the South-East.

The new HDB town, Tengah will see the launch of its first EC, Novo Place in Nov. The EC project is within a 5 mins’ walk to Tengah Park MRT station and within 1km to the popular Princess Elizabeth Primary School.

With a cut in interest rate in Sept and more rate cuts on the horizon, buyers can potentially qualify for a bigger loan and yet see a smaller monthly mortgage payment. This means that buyers previously sitting on the fence due to loan constraints can now buy their new home. More buyers will enter the market and sales take up may increase.

Barring unforeseen circumstances, developers may sell up to 5,000 new homes while prices are expected to be stable, with an increase between 0% and 2% in 2024. This will be the lowest sales since the Global Financial Crisis in 2008 where only 4,264 units were sold.

Figure 2: Developer’s New Sales Volume (2007 to 2024)

* estimates
Source: URA, Huttons Data Analytics as of 1 Oct 2024

Potential Upcoming Projects

Source: URA, Huttons Data Analytics as of 1 Oct 2024