Landed Home Price Growth Slows Down 18 2Q2024
In the second quarter of 2024, landed home prices in Singapore have continued to rise for the third consecutive quarter, according to the latest transaction statistics released by the URA. However, the pace of increase has slowed down compared to the previous two quarters. While this segment of the residential market has seen a growth of 4.5% in the first half of this year, it is lower than the 7% growth recorded in the same period in 2023.
Mohan Sandrasegeran, head of research and data analytics at SRI, believes that the more moderate pace of price increase is a sign of a balanced demand and supply in the market, which is largely driven by consistent demand. He notes that the persistent interest in landed properties, particularly from private home upgraders and high-net-worth individuals, has contributed to the sustained demand.
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According to the data compiled by Knight Frank, the total sales value of landed property transactions in the first half of 2024 stood at $2.6 billion, 18.3% higher than the $2.2 billion recorded in the second half of 2023. Nicholas Keong, head of the residential and private office at Knight Frank, attributes this increase to the preference for new landed homes among boutique developers over existing, older landed homes. He points out that smaller developers have been acquiring older landed homes, especially those on decently sized plots, and redeveloping them into at least five new homes for sale.
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There has been a spike in high-value transactions, with the number of landed property transactions priced at $10 million and above increasing from 33 units in the first quarter of 2024 to 38 units in the second quarter of 2024. Sandrasegeran believes that this trend has been supported by affluent buyers looking for long-term investment opportunities and prestigious addresses, due to the limited supply of high-end landed properties. He notes that the GCB market has seen at least 10 caveated transactions in the first half of 2024, up from seven in the same period last year. This is a significant increase following a quieter year for GCB market activity due to a money laundering scandal and high interest rates in the previous year.
In terms of absolute price, the largest transacted GCB in the first half of 2024 was a 19,554 sq ft property at Ford Avenue that was sold for $39.5 million, or $2,020 psf, in March. The buyer is reported to be Grace Wee Jingsi, the youngest child of United Overseas Bank CEO Wee Ee Cheong. Other notable GCB deals include a Bin Tong Park property reportedly bought by the daughter of Chinese metal tycoon Xiang Guangda at $84 million ($2,988 psf) and a GCB in the Gallop Road/Woollerton Park area bought by the wife of Forrest Li, founder of Sea Limited, for $42.5 million, or $2,544 psf.
Both Sandrasegeran and Keong are optimistic about the high-end landed residential market for the rest of this year, with buying sentiment expected to be boosted by a more favourable economic outlook and high buyer confidence in Singapore’s property market. Demand for landed homes is likely to be driven by high-net-worth individuals and newly-minted Singapore citizens.
Keong expects landed home prices to continue to rise in the next six months, with many sellers holding firm on their price premiums for highly sought-after properties. In addition, the scarcity of available landed properties in the resale market will further support price growth for the rest of the year.
Sandrasegeran adds that the landed property market is expected to remain resilient as buyers seek larger living spaces and more exclusive residences. He notes that this demand is particularly strong among private home upgraders and high-net-worth individuals, who appreciate the long-term investment opportunities and luxurious living spaces that landed properties offer.