The Singaporean private market shows the first signs of recovery after a substantial cooldown in both sales and rental prices; the activity, however, remains subdued in the regional submarkets favored by foreigners and the high-end housing segment.

This extended overview from the Global Property Guide covers key aspects of the Singaporean housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

• Housing Market Snapshot
• Supply Highlights
• Demand Highlights
• Rental Market
• Mortgage Market
• Socio-Economic Context

Housing Market Snapshot

After four consecutive quarters of growth in real terms, the Property Index for All Private Residential Properties published by the Urban Redevelopment Authority of Singapore (URA) registered a quarter-on-quarter decline of 0.68% in Q3 2024 (-1.05% when adjusted for inflation). While the index recorded a year-on-year growth of 4.44% (2.20% after inflation adjustment) as of Q3 2024, the cumulative price increase for private homes in the first three quarters of 2024 was a modest 1.6%. This marks a notable deceleration compared to the 3.9% growth achieved during the same period in 2023 and the 8.2% growth seen in the first nine months of 2022, reports the URA.

Singapore house price annual change:

The third quarter's correction was predominantly driven by landed properties (privately owned standalone terrace houses, semi-detached houses, bungalows, and shophouses), which experienced a sharp 3.4% quarter-on-quarter decline, following a 1.9% increase in Q2 2024. In contrast, the non-landed properties (strata-titled private condominiums) exhibited greater stability, with prices posting a marginal quarter-on-quarter increase of 0.1%, although this marked a deceleration from the 0.6% growth observed in the previous quarter.

Among non-landed properties, the Rest of Central Region (RCR) stood out with a quarter-on-quarter price increase of 0.8%. Prices in the Outside Central Region (OCR) remained stable, while the Core Central Region (CCR) underperformed, registering a 1.1% quarter-on-quarter decline. According to Savills' analysis, the weaker performance in the CCR can be attributed to the lack of significant project launches in recent quarters, which reduced new sales - typically priced higher than resale units. In addition, foreign demand in this market segment has softened, contributing to the price adjustment.

Property Price Index of Private Residential Properties, quarterly vs annual movement:

In the high-end segment of the non-landed private residential market, monitored by Savills, prices declined by 0.4% quarter-on-quarter to SGD 2,582 (USD 1,958) per square foot in Q3 2024. On a year-on-year basis, this segment recorded a 0.7% contraction, marking its first annual decline since Q4 2020.

Average sales prices in high-end non-landed private properties:

Looking ahead, industry experts anticipate a potential partial rebound in prices in Q4 2024, supported by improved market sentiment, lower interest rates, and a more favorable economic outlook. CBRE forecasts a 3% increase in private residential property prices for the full year 2024, emphasizing that "prices are unlikely to correct significantly due to resilient household balance sheets and low unsold inventory."

In the public housing segment, the Resale Price Index for Housing and Development Board (HDB) units increased by 2.7% quarter-on-quarter and 8.07% year-on-year in Q3 2024, narrowing the price gap between the public and private housing sectors. "This asymmetrical rate of price changes is likely to spawn greater upgrader demand from the HDB market for larger private homes in the coming quarters, replacing investment demand that often funnels into the 1- and 2-bedroom types for OCR launches," Savills experts commented.

The HDB develops and manages residential properties designed to provide affordable housing options for Singaporean citizens. As of 2023, the HDB units accommodated 77.8% of the country's resident households, according to the figures from the Singapore Department of Statistics (DOS). Sold primarily on a 99-year leasehold basis, these units are subsidized by the government and priced lower than private housing, ensuring accessibility. Ownership is subject to eligibility, restricted to Singapore citizens and certain categories of permanent residents, with a mandatory minimum occupancy period (MOP) of five years before resale.

For the year ahead, Savills is forecasting a price change range of -1% to +5% for the segment. The potential for a negative shift stems from the lower land prices paid by developers since 2023, which provide a buffer to adjust launch prices in response to demand. However, the +5% scenario could materialize if HDB resale prices continue to rise sharply, coupled with an increasing number of Singaporeans, particularly baby boomers and younger members of Generation X, investing their savings in property on behalf of their children.

Supply Highlights:

Unsold Private Inventory Remains Low Amid Subdued New Launches

In Q3 2024, the number of private residential units launched showed a significant rebound, more than doubling from 634 units in Q2 2024 to 1,284 units. Despite this recovery, the figure remained substantially lower than the 2,805 units launched during the same period in 2023. "A combination of heightened construction costs, development risks and slower sales volumes have led to developers taking a watch and wait stance as they await market momentum to improve," observed professionals from Cushman & Wakefield.

Data Source: URA.

The quarter-on-quarter growth was driven by increased activity in the RCR and OCR regions. Launches in the RCR increased from 249 units in Q2 2024 to 468 units in Q3 2024, while the OCR launches surged from 126 units to 782 units. In contrast, the CCR experienced an 86.9% contraction in launched units, recording just 34 units. The OCR accounted for the majority of launches in Q3 2024, with 60.9%, followed by 36.4% in the RCR and 2.6% in the CCR.

Uncompleted private residential units launched, by district:

The total unsold inventory of private residential units (excluding executive condominiums) declined by 3.1% quarter-on-quarter to 20,122 units in Q3 2024, reversing a trend of three consecutive quarters of growth. The majority of those (19,940 units) comprised uncompleted private residential projects within the pipeline supply with planning approvals. Year-on-year, unsold inventory increased by 17.3%, though it remained below the ten-year annual average of 23,369 units and was significantly lower than the last peak of 37,799 units recorded in Q1 2019.

Data Source: URA.

Data from the URA indicates that approximately 34,120 units, including executive condominiums, could be available for sale over the next few years, factoring in both approved and pending pipeline supply. "The Government will continue to calibrate housing supply to cater to demand so as to promote a stable and sustainable property market," the authority's press release stated.

Note: Total number of units to be delivered within the projects including both sold and unsold units.
Data Source: URA.

Demand Highlights:

First Signs of Recovery in Private Market, Foreign Demand Weighed Down by ABSD Hikes

After a record low in private residential sales during H1 2024, the Singaporean property market showed first signs of recovery in Q3 2024. According to the URA, residential sales reached 5,372 units in the quarter, reflecting a 9.3% quarter-on-quarter and 3.3% year-on-year increase. Despite these improvements, total sales for the first three quarters of 2024 remained 1.3% below the corresponding period in 2023. "Buying demand has slowed and remains selective amidst a still-elevated interest rate environment," observed the experts from Cushman & Wakefield.

Data Source: URA.

New sales in the primary residential market saw a robust quarter-on-quarter increase of 60.0% in Q3 2024, with 1,160 units sold. However, sales were still 40.4% lower compared to Q3 2023. This growth was attributed to the quarter's rebound in launched units, offering homebuyers a wider variety of options, particularly in the RCR and the OCR. New sales in these regions rose significantly, by 70.0% and 72.7% quarter-on-quarter, reaching 391 and 715 units, respectively.

In contrast, the CCR continued to experience declining sales, primarily due to the lack of major new launches and the higher Additional Buyer's Stamp Duty (ABSD) rates for foreign buyers. "As demand for homes in the CCR is largely driven by foreigners, who have now taken a backseat, things have appeared to be looking better for the RCR and the OCR, where the target market is largely Singapore residents. With more new launches and interest rates starting to decline, sentiments from homebuyers may have turned positive, leading to an improvement in new sales," noted Savills experts.

Looking ahead, CBRE forecasts that a total of 5,000-5,500 new homes could be sold in 2024, with attractive developer pricing being crucial to sustaining performance in new launches. "Recent interest rate cuts could catalyze a recovery in sentiment and sales in Q4 2024 amid a healthy pipeline of attractive new launches. A more significant rebound in new developer sales, however, is likely to occur only in 2025 when greater clarity emerges on global economic conditions," stated CBRE in their latest report.

Private residential units sold in the primary market:

Secondary sales also continued to rise in Q3 2024, though at a more moderate pace compared to the 36.7% surge in Q2. Secondary sales increased marginally by 0.5% quarter-on-quarter to 4,212 units - the highest volume since Q2 2022 - and marking a second consecutive quarter of growth. "The higher new sales may have meant that more have entered the primary sales market, leading to a slower growth in the secondary sales market," Savills explained.

Within secondary sales, the RCR and the OCR saw continued growth for the second quarter in a row, rising by 0.8% and 3.4% quarter-on-quarter to 1,249 and 2,293 units, respectively. Meanwhile, the CCR secondary sales declined by 8.7% quarter-on-quarter to 670 units, although this still represented a 25.2% year-on-year increase.

Private residential units sold in the secondary market:

Demand from foreign homebuyers remains subdued following several successive Additional Buyer's Stamp Duty (ABSD) hikes, with the April 2023 increase raising the rate for foreigners to 60%. Coupled with a government crackdown on money laundering, foreign purchases plunged to just 2% of new sales and 1.4% of resales from January to September 2024. Permanent resident (PRs) buyers also declined but accounted for 10% of new sales and 20% of resales during the same period.

High-net-worth individuals (HNWI) continue to prefer the CCR, although the share of foreign buyers in luxury homes priced from SGD 5 million (USD 3.8 million) and above in the region has decreased from 62% in 2023 to 49% in the first three quarters of 2024. Despite this decline, activity in the luxury market remains bolstered by Singapore permanent residents and nationals from the Free Trade Agreement (FTA) countries, such as the US, Switzerland, Iceland, Liechtenstein, and Norway, who benefit from ABSD remission.

"Although the proportion of foreign buyers has declined, we are seeing a gradual increase in transactions from new PRs and Singaporeans, as well as global investors who qualify for ABSD exemptions," observed Sotheby's International Realty, cited by The Business Times.

Note: Data includes new home sales and resales.
Data Sources: URA, Sotheby's International Realty via The Business Times.

ABSD rates for residential properties, 2018-2023:

Rental Market:

Overall Cooldown Moderating, High-End Property Rents Still in Decline

According to the research carried out by the Global Property Guide in Q4 2024, the average advertised rent for residential units in Singapore stood at USD 2,826 for 1-bedroom units, USD 3,638 for 2-bedroom units, and USD 5229 for 3-bedroom units.

The corresponding gross rental yields averaged 3.40%, 0.2 percentage points down from 3.60% previously reported in Q3 2023. Regional variation in performance among the assessed submarkets was only marginal, with yields slightly above the national average seen in Alexandra / Commonwealth (3.87%) and Hougang / Punggol / Sengkang (3.64%), while the lowest level was recorded in Newton / Novena (2.89%).

Data Source: URA.

The downward shift in estimated yields is underpinned by the sharp reverse of the private rental inflation trend. After a two-year period of accelerated growth, the Rental Index of Private Sector Residential Properties reported by the URA has now been demonstrating an annual decline for three quarters in a row. In Q3 2024, rental rates for private properties across the island dropped by 4.0% year-on-year, following 4.0% and 0.6% declines in the previous two quarters. The decrease was more pronounced for landed properties (-6.0%) than for non-landed properties (-3.7%).

"A mild fall of up to -5% in rents may be recorded in 2024 <…> due to steep number of supply completions from 2023, increasing tenants' resistance and moderating rental demand," Cushman & Wakefield commented on the developments.

The short-term dynamic, however, shows that this rapid cooldown in rents may have turned the corner, as in quarter-on-quarter terms the index saw its first uptick in Q3 2024 (+0.8% QoQ), driven by stronger performance of landed properties island-wide and non-landed properties in the Rest of Central Region (RCR) and the Outside Central Region (OCR).

Rental Index of Private Sector Residential Properties, quarterly vs annual movement:

In contrast with other regions, rents in non-landed units in the Core Central Region (CCR) continued to decline for the fifth quarter in a row, the decline consistent across units with varying numbers of bedrooms, according to Savills analysis. "Given the global economic uncertainty and the relatively limited pool of professional expatriates with substantial housing allowances, this suggests that the CCR still lacks the fundamental conditions for rental growth in the near term," said their Q3 2024 residential leasing briefing.

In a similar pattern, rents for the upper segment of non-landed private residential projects tracked by Savills continued to decline as well. Cumulatively, average monthly high-end rents have dropped by over 7% since the last peak in Q2 2023, reaching SGD 5.75 (USD 4.36) per square foot in Q3 2024.

Average rents in high-end non-landed private properties:

At the same time, in the public housing segment, median rents reported by the HDB in Q2 2024 for 3-, 4-, and 5-room apartments and executive units grew by an average of 2% year-on-year, the annual movement varying greatly across the Singaporean towns.

Looking into the future, the projection from Savills sees further moderation of the private rental dynamic: "We had anticipated an end to the slide in rents towards the end of the year. However, given the fact that it came early in Q3 2024, we now amend our forecast of a 5.0% year-on-year (YoY) decline in rents to a 2.5% drop. For 2025, rents are expected to drift sideways as businesses face headwinds and continue to watch their labor costs."

As the macroeconomic environment improves and recent lower launch levels translate into a fall in new supply coming into the market in the next few years, rents in Singapore can be expected to return to steady growth. "Despite the current market slowdown, momentum in the overall private residential market could be building slowly with market conditions expected to improve in 2025. <…> A combination of recovering demand and lower levels of supply bodes well for price and rental growth," concluded Cushman & Wakefield analysis.

Mortgage Market:

Decreasing Interest Rates to Stimulate Market Activity

Unlike most central banks, the Monetary Authority of Singapore (MAS) does not conduct monetary policy by adjusting domestic interest rates, but rather uses the Singapore dollar nominal effective exchange rate (S$NEER) based on a weighted basket of currencies from major trading partners as its primary intervention tool.

This approach causes Singapore's interest rates to be greatly influenced by global markets and more specifically by the US market. The Singapore Overnight Rate Average (SORA), which since 2019 has been gradually replacing the Singapore Inter-Bank Offered Rate (SIBOR) as the main lending benchmark and basis for new floating-rate mortgages, tends to move in tandem with the US Federal Funds Target Range (FFTR), typically trending below it.

Following the two consecutive 0.5 pp cuts announced by the US Federal Reserve in September and November 2024, both the 1-month Compound SORA and the 3-month Compound SORA have been decreasing, most recently reported by the MAS at 3.01% and 3.21%, respectively, at the end of November.

Data Sources: MAS, FRED.

According to the information on individual loan products accumulated by the property platform PropertyGuru, major banks in Singapore currently offer floating-rate mortgages with interest calculated as 1-month or 3-month Compounded SORA plus bank spread of up to 1% and fixed-rate mortgages with 1 to 3 years lock-in period (after which the rate switches to SORA plus bank spread).

At the time of research in December 2024, fixed-rate mortgages for home purchases were offered at interest rates between 2.40% and 4.25% during the locked period. Net interest on SORA-linked floating-rate mortgages ranged from 3.25% to 4.43% during the locked period.

Interest rates on mortgage loans for the purchase of completed residential properties, selected banks:

Local and global experts agree that interest rates are likely to continue the downward trajectory in the upcoming months, which in turn should have a positive effect on market activity. "Interest rates are expected to gradually ease over time in line with cuts by the United States Federal Reserve, which should improve buyer affordability and support sales volume," said Cushman & Wakefield in their commentary on Q3 2024 developments in the private residential sector in Singapore. "Notwithstanding that the effects of the interest rate cut are not likely to be immediate, but will mostly be felt from next year onwards, this might just be the impetus to tip homebuyers who are presently sitting on the fence into a purchase, especially those buying for their own occupation," concluded the Q3 2024 market update from Knight Frank.

Data Source: MAS.

The shift in trend towards a more active lending market is also observed in the volume of new housing loans granted. According to the data published by the MAS, in the first three quarters of 2024 limits granted reached SGD 30.8 billion (USD 23.4 billion) for owner-occupied properties and SGD 6.4 billion (USD 4.8 billion), their combined volume exceeding the comparable period in 2023 by 14.9%.

The total amount of outstanding housing loans in Singapore, increased by a marginal 0.8% year-on-year in 2023, a notable slowdown compared to 3.1% and 4.1% growth in 2022 and 2021, respectively. The overall growth was driven by owner-occupied properties (+1.3% year-on-year), while the volume of loans for investment properties dropped by 1.5%. As of Q3 2024, the total stock of outstanding housing loans stood at SGD 224.1 billion (USD 170 billion), nearly 80% of that amount represented by loans on owner-occupied properties and about 20% by loans on investment properties.

Sized against the Singaporean economy, the residential mortgage market was equivalent to 33% of GDP in current prices in 2023, slightly up from 32.1% the previous year but below the estimated 45.1% a decade ago in 2014.

Based on the latest reporting from the DOS, the current share of mortgages in total household debt is 73.4%, of which 61.7% is loans from financial institutions and 11.7% loans from the HDB, which provides loan options with lower downpayment and higher loan-to-value ratio to qualifying Singaporean nationals.

Data Sources: MAS, DOS.

Socio-Economic Context:

Gradual Recovery Continues, Stronger Annual Growth Projected for 2024 and 2025

Singapore continues to follow a path of gradual macroeconomic recovery. Due to a contraction in manufacturing originating from the downturn in the global electronics cycle, the country's real GDP growth moderated from 3.8% in 2022 to 1.1% in 2023. The International Monetary Fund (IMF) staff report on Singapore notes that the growth started to recover in the second half of 2023, reflecting improved global demand for semiconductors, and strengthened further in early 2024, supported by strong inbound tourism. The IMF currently projects the Singaporean economic growth to reach 2.6% in 2024 and stabilize at 2.5% from 2025 onward. These projections are in line with the most recent Survey of Professional Forecasters published by the MAS, which also expects GDP to expand by 2.6% this year, with higher forecasts for the finance & insurance, construction, and wholesale & retail trade sectors.

Consumer Price Index (CPI) inflation in Singapore eased from a 6.1% peak in 2022 to 4.8% in 2023 and was most recently reported at 1.4% in October 2024. The gradual disinflation is expected to continue, the annual levels projected by the IMF at 2.6% for 2024 and 2.2% for 2025. The MAS Survey of Professional Forecasters also sees CPI inflation within the 2.0-2.4% range in 2025.

Data Source: IMF.

Singapore's labor market conditions started to ease in 2023 amid weaker GDP growth and an inflow of foreign workers. Nonetheless, the total unemployment rate has remained low, most recently reported by the DOS at 1.8% in Q3 2024. The resident unemployment (including Singaporean citizens and permanent residents) continued to trend slightly higher at 2.6% in Q3 2024.

According to the DOS data, as of mid-year 2023, citizens and permanent residents made up about 62% of the total labor force in Singapore, with the remaining 38% represented by non-resident foreign workers.

The October 2024 macroeconomic review from the MAS states that the ongoing upturn in economic activity should support job creation in the quarters ahead. At the same time, labor demand is unlikely to be strongly resurgent, as the GDP growth pickup is largely being driven by capital-intensive sectors.

Data Source: DOS.

The country's financial sector, which is highly integrated into international financial markets and serves as a global and regional financial hub, remains sound, according to the IMF assessment. "The banking sector, which comprises nearly 60 percent of total financial sector assets, continues to demonstrate ample capital buffers, sound asset quality, high profitability, and a comfortable liquidity position. <…> The non-bank financial institutions, mainly comprising investment funds and insurers, have weathered stresses from the high interest rates well," said the IMF staff report.

In June 2024, Fitch Ratings affirmed Singapore's 'AAA' standing with a stable outlook, citing its exceptionally strong fiscal and external balance sheets, high income per capita, prudent macroeconomic policy framework, and favorable business environment.

At the same time, the economic outlook for Singapore is still subject to uncertainties. Despite having an overall impressive track record, the economy continues to face evolving domestic and external challenges arising from geoeconomic fragmentation, rapidly aging population, and technological advancements, including Artificial Intelligence (AI), which will require adaptation and policy adjustment to ensure sustainable growth in the medium and long run.

Sources:

1. Monetary Authority of Singapore
   1. (MAS)Statistics: https://www.mas.gov.sg/
   2. Monetary Policy Framework: https://www.mas.gov.sg/
   3. Consumer Price Developments in October 2024: https://www.mas.gov.sg/
   4. Recent Economic Developments: https://www.mas.gov.sg/
   5. Macroeconomic Review Volume XXIII Issue 2, Oct 2024: https://www.mas.gov.sg/
   6. MAS Survey of Professional Forecasters: September 2024: https://www.mas.gov.sg/
   7. Data on Housing and Bridging Loans: https://www.mas.gov.sg/
2. Singapore Department of Statistics (DOS)
   1. Household Sector Balance Sheet: https://www.singstat.gov.sg/
   2. National Accounts: https://www.singstat.gov.sg/
   3. Labor, Employment, Wages & Productivity: https://www.singstat.gov.sg/
   4. Statistics on Resident Households: https://www.singstat.gov.sg/
3. Urban Development Authority (URA)
   1. Private Residential Time Series Statistics: https://www.ura.gov.sg/
   2. Overall Private Housing Prices Declined in 3rd Quarter 2024: https://www.ura.gov.sg/
4. Housing and Development Board (HDB)
   1. Rental Statistics: https://www.hdb.gov.sg/
   2. Resale Statistics: https://www.hdb.gov.sg/
   3. Flat and Grant Eligibility: https://www.hdb.gov.sg/
5. Inland Revenue Authority of Singapore (IRAS)
   1. Additional Buyer's Stamp Duty (ABSD): https://www.iras.gov.sg/
6. International Monetary Fund (IMF)
   1. Country Overview: Singapore: https://www.imf.org/
   2. IMF Staff Country Report: https://www.imf.org/
7. Federal Reserve Economic Data (FRED)
   1. Federal Funds Target Range - Upper Limit: https://fred.stlouisfed.org/
8. Cushman & Wakefield
   1. Comments on URA Real Estate Statistics for 3rd Quarter 2024: https://www.cushmanwakefield.com/
9. Knight Frank
   1. Singapore Residential Market Update - Q3 2024: https://www.knightfrank.com.hk/
10. Savills
    1. Singapore Residential Leasing Q3 2024: https://pdf.savills.asia/
    2. Singapore Residential Sales Q3 2024: https://pdf.savills.asia/
11. CBRE
    1. Commentary on URA Q3 2024 Statistics - Office, Retail, and Residential: https://www.cbre.com.sg/
12. Fitch Ratings
    1. Fitch Affirms Singapore at 'AAA'; Outlook Stable: https://www.fitchratings.com/
13. PropertyGuru
    1. Will Singapore Interest Rates for Home Loans Go Down in 2024? https://www.propertyguru.com.sg/
    2. Home Loans: https://www.propertyguru.com.sg/
14. The Business Times
    1. Foreign Banks in Singapore Slash Home Loan Rates to as Low as 2.45%: https://www.businesstimes.com.sg/
    2. DBS, OCBC, UOB Aim to Stay Competitive as Foreign Players Slash Mortgage Rates: https://www.businesstimes.com.sg/
    3. Dissecting Foreign Buying in Singapore Homes, After Three ABSD Hikes: https://www.businesstimes.com.sg/
15. The Straits Times
    1. Fixed Home Loan Rates to Fall: https://www.straitstimes.com/