Private Residential Resale Prices Hold Steady 3Q2024
The latest report by OrangeTee Research & Analytics reveals that private resale home prices have remained stable in the third quarter of 2024, despite the current high-interest rate environment. According to the Urban Redevelopment Authority (URA), the average resale prices for landed and non-landed private residential homes (excluding executive condos) remained constant at $1,713 psf from the second to the third quarter of 2024. However, there were some fluctuations in prices within the Core Central Region (CCR), Rest of Central Region (RCR), and Outside of Central Region (OCR).
In the CCR, average resale prices increased by 1.6% from $2,145 psf in the second quarter to $2,181 psf in the third quarter of 2024. This was a reversal of the 3.6% decline recorded from the first to the second quarter of 2024. Similarly, prices in the RCR saw a 1.4% growth from $1,837 psf to $1,863 psf in the same period, although this was lower than the 3.1% increase seen in the previous quarter. On the other hand, the average price of private residential resale homes in the OCR dropped by 0.4% from $1,495 psf to $1,489 psf, reversing the 3.5% growth in prices seen in the second quarter.
Despite the high interest rates, the demand for resale homes remained robust, with URA recording 3,860 units sold in the third quarter of 2024. This represents a 1.5% increase from the 3,802 units sold in the second quarter. Resale transactions accounted for 71.9% of the total 5,372 residential sales (including new sales, resale, and subsale) in the third quarter. This is slightly lower than the record-high market share of 77.4% recorded in the second quarter of 2024, as reported by OrangeTee.
The strong demand for resale homes can be attributed to the increase in housing supply, with close to 30,000 private homes completed in the last two years. This has expanded the housing options for potential buyers. Additionally, with new private home prices remaining high, buyers may turn to the secondary market for more affordable private housing.
Recent launches such as Norwood Grand in the OCR and Meyer Blue in the RCR have seen strong sales, with average prices of $2,086 psf and $3,252 psf respectively. These are significantly higher than the average resale prices in their respective regions, indicating a willingness among buyers to pay a premium for newly launched projects.
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OrangeTee also predicts that the recent interest rate cuts by the US Federal Reserve may spur sales in the luxury home segment, as borrowing costs decrease. However, high-net-worth investors who are less affected by interest rate fluctuations are likely to base their purchase decisions on factors other than mortgage rates. Nevertheless, buyers who may have been hesitant due to the high interest rates may now be more inclined to enter the market.
Looking ahead, OrangeTee expects resale prices to continue growing in the next few years due to the projected decrease in available stock. The number of private homes expected to be completed in 2025 is significantly lower at 5,300 units, compared to 9,100 units expected to be completed this year. As such, OrangeTee predicts a positive outlook for resale homeowners, barring any major economic crises or unforeseen circumstances.
