The latest report by OrangeTee Research & Analytics shows that despite the prevailing high-interest rate environment, private resale home prices remained steady in 3Q2024. According to URA records, the average resale prices for both landed and non-landed private residential homes, excluding executive condos (ECs), remained unchanged at $1,713 psf from 2Q2024 to 3Q2024. However, there were some fluctuations in average resale prices within the Core Central Region (CCR), Rest of Central Region (RCR), and Outside of Central Region (OCR).
In the CCR, there was a 1.6% increase from $2,145 psf in 2Q2024 to $2,181 psf in 3Q2024. This partially reverses the 3.6% drop in prices seen in the previous quarter. In the RCR, prices also increased, growing 1.4% from $1,837 psf to $1,863 psf. However, this was a moderation from the 3.1% growth in the previous quarter. Conversely, the OCR saw a 0.4% drop in average resale prices from $1,495 psf to $1,489 psf in 3Q2024, a turnabout from the 3.5% growth seen in the previous quarter.
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Despite these fluctuations, demand for resale homes remained robust, with URA recording 3,860 transactions in the 3Q2024, marking a 1.5% increase from the 3,802 units sold in 2Q2024. OrangeTee notes that this accounted for 71.9% of the total 5,372 residential sales, including new sales, resale, and subsale, in the quarter. This is a drop from the record high of 77.4% market share in 2Q2024.
In the first nine months of 2024, a total of 10,351 resale homes were transacted, showing a 21.8% increase from the same period in 2023. Similarly, the market share of resale homes saw a similar increase, growing from 57.8% in the first three quarters of 2023 to 71.3% this year. According to OrangeTee, this can be attributed to the substantial increase in housing supply, with close to 30,000 private homes completed in the past two years. This has provided buyers with more options and a wider spectrum of housing choices.
The recent launches of Norwood Grand and Meyer Blue in the OCR and RCR respectively have seen strong demand, with units being sold at a premium compared to the average resale prices in those regions. This trend is likely to continue, with the interest rate cuts by the US Federal Reserve expected to spur luxury home sales due to the lower cost of borrowing. However, high-net-worth investors who are less sensitive to interest rate fluctuations may not base their property purchase decisions on mortgage rates.
OrangeTee predicts that the interest rate cuts may encourage more cautious buyers to enter the market, leading to an increase in resale prices over the next few years. This is further supported by the projected decrease in available stock, with only 5,300 private homes expected to be completed in 2025, compared to 9,100 units this year. Barring any major economic crises or unforeseen circumstances, OrangeTee forecasts positive prospects for resale homeowners.…