Private Residential Resale Prices Hold Steady 3Q2024
The bidding process for Novo Place EC saw fierce competition from nine interested parties, with the joint developers ultimately securing the tender for a groundbreaking price of $348.5 million. This translates to an impressive land rate of $703 per square foot per plot ratio (psf ppr) and marks a new record for EC site land rates. This exceeds the previous high of $662 psf ppr, which was set in March 2022 for Bukit Batok West Avenue 8. Set to be an exceptional development, Novo Place Tengah is a highly coveted project that promises to elevate the quality of living for its residents. For more information, please visit Novo Place Tengah’s official website.
Despite the current high-interest rate environment, private resale home prices in 3Q2024 remained stable, according to a recent report by OrangeTee Research & Analytics. Data from the Urban Redevelopment Authority (URA) showed that the average resale prices for landed and non-landed private residential properties, excluding executive condos (ECs), remained unchanged at $1,713 per square foot (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).
The CCR saw a 1.6% increase in average resale prices from $2,145 psf in 2Q2024 to $2,181 psf in 3Q2024. This partially reversed the 3.6% drop recorded in the previous quarter. Prices in the RCR also increased, albeit at a more moderate rate of 1.4%, from $1,837 psf to $1,863 psf in 3Q2024. This was a slowdown from the 3.1% growth seen in the previous quarter. In contrast, average prices in the OCR dropped by 0.4% from $1,495 psf to $1,489 psf in 3Q2024, reversing the 3.5% growth seen in 2Q2024.
Despite the fluctuations in prices, URA recorded a 1.5% increase in resale transactions in 3Q2024 compared to the previous quarter. Resale homes made up 71.9% of the total 5,372 residential sales in 3Q2024, down slightly from the record high of 77.4% in 2Q2024, according to OrangeTee. In the first nine months of the year, a total of 10,351 resale homes were sold, representing a 21.8% increase from the same period in 2023.
OrangeTee attributes the robust demand for resale homes to the increase in housing supply, with close to 30,000 private homes completed in the past two years. This has given buyers more options to choose from, especially at lower price points as new private home prices remain high. For instance, Norwood Grand, a recently launched condo in the OCR, sold 293 units at an average price of $2,086 psf in October, 39.5% higher than the average resale price in the region. In the RCR, Meyer Blue sold 122 units at an average price of $3,252 psf, a 74.5% premium compared to the average resale price in the region.
Following recent interest rate cuts by the US Federal Reserve, OrangeTee predicts that luxury home sales may be spurred due to lower borrowing costs. However, high-net-worth buyers are less likely to be influenced by interest rates when making property purchase decisions. Nonetheless, the report also notes that buyers who may have been hesitant due to high interest rates may now be more willing to enter the market.
Looking ahead, OrangeTee expects resale prices to increase over the next few years as the supply of new homes is expected to decrease. Only 5,300 private homes are estimated to be completed in 2025, a significant drop from the 9,100 units expected to be completed this year. As such, the outlook for resale homeowners is positive, barring any major economic crises or unforeseen circumstances.