Cautious Optimism for Private Property Prices in Singapore 2024

The Singapore property market is navigating a period of moderate growth and evolving challenges. Expected to be resilient in 2024, the market is influenced by sustained demand, government measures, and macroeconomic factors. While Singapore property prices are predicted to rise slower and high-interest rates remain adjusted, residential private property can be considered a good investment opportunity — one that requires careful consideration of market trends, regulatory changes and private property price trends. 

Short-Term Property Price Appreciation, More Reasonable Entry Points for Investment

One of the defining characteristics of the 2024 market is the approach towards a peak in home prices. This scenario, often indicative of a more mature market phase, suggests that the room for significant short-term property price appreciation in Singapore might be limited. The upside is that more cautious pricing strategies by developers could lead to more reasonable entry points for investment. This environment is conducive to strategic investments, particularly for those keen on long-term value creation rather than immediate gains.

Concurrently, the Singapore government’s active role in managing the property market dynamics through increased land sales must be noticed. The GLS program’s escalation is a deliberate effort to regulate the supply of new housing units and, by extension, influence market prices. Introducing a significant number of new units into the market has the potential to moderate price growth, particularly in segments where supply outpaces demand.

This interplay between near-peak pricing and the influx of new units from government land sales presents a nuanced decision-making landscape for investors. On the one hand, the potential for short-term price growth might be tempered, but on the other, the increased supply could lead to competitive pricing and potentially higher yields in the long run.

In the 2024 Singapore property market, investors should balance short-term market conditions with long-term trends, focusing on location, quality, and appreciation potential. 

Singapore Property Price Forecast and Sales Projections

Amidst the backdrop of economic headwinds and market uncertainties, Ismail Gafoor, the CEO of PropNex, provides an insightful perspective on the resilience of Singapore’s property market heading into 2024. 

Singapore’s average property price forecasts indicate a modest yet steady growth anticipated to rise by 3-5% in the private residential sector. 

The Housing and Development Board (HDB) resale market, a critical component of Singapore’s housing market, is also expected to uptick at a 4-5% rise,  indicative of the sustained demand for public housing.

However, an intriguing shift is noted in the sales volumes, which have declined, reaching a seven-year low in 2023. This downturn in sales volume is emblematic of a change in buyers’ circumspection of their purchase decisions seeking value and long-term stability over speculative gains.

This highlights a market that, while confronting challenges, retains a fundamental resilience. The expected growth in property prices, coupled with more cautiously optimistic buyers, points towards a maturing market. In this environment, buyers need to be more selective and sellers need to adjust their property price expectations from this time, just a short year ago. 

Overall, Singapore property prices in 2024 offer a reassuring outlook for investors and homeowners alike, albeit at a more measured pace. 

Singapore Property Prices by District

Investors should also remain mindful of the potential for market corrections and shifts in buyer sentiment. 

Understanding broader economic factors and targeting properties with an inherent value in prime locations is key for stability in a fluctuating market. Here, we look at the average growth rate of property prices (in percentages) over 10 years for Districts throughout Singapore:

Source: EdgeProp Average Price Growth Rate (in %) for private residential properties, including landed homes, by District for 2013 to 2023

The Singapore property market offers both challenges and opportunities for investors. A judicious approach will be key to a strategically informed and long-term perspective on property investment.

2023 Market Review as A Prelude to 2024

In 2023, the Singapore property market unfolded with restrained expansion and measured optimism. Amidst a backdrop of global economic fluctuations and persistently high-interest rates, the market experienced a notable shift in its growth trajectory. The Urban Redevelopment Authority (URA) flash estimates released on 2 January 2024 reported a 6.7% rise in the overall private residential price index, a deceleration from the more robust 8.6% increase in the preceding year (2022).

This moderation in price growth was not an isolated phenomenon but a reflection of broader economic currents. Global economic headwinds from geopolitical tensions and uncertainties exerted downward pressure on various markets worldwide. In Singapore, these external factors converged with domestic fiscal inflationary policies, leading to a noticeable cooling in the once-heated property market.

The year also saw the Singapore government’s proactive measures in recalibrating the market. By adjusting the housing supply with a slight increase anticipated in 2024 to 9,450 units (from 9,250 in 2023) through the Government Land Sales (GLS) program, increasing the supply of private housing and implementing targeted cooling measures, the authorities aimed to align property prices in Singapore more closely with fundamental economic indicators. These interventions were critical in preventing an overheated market and ensuring long-term sustainability.

Moreover, the elevated interest rates, a departure from the historically low rates that the market had grown accustomed to, played a pivotal role in shaping buyer sentiment. The higher cost of borrowing naturally tempered the enthusiasm of prospective buyers, leading to more calculated and cautious investment decisions. This shift in buyer behaviour was particularly evident in the reduced transaction volumes observed towards the year’s end, indicating a more selective market.

As we pivot through the Q3 2023 moderation period, it serves as a prelude to what might be expected in 2024. The foundational elements set in the preceding year — from economic policies to market sentiment — are likely to influence the trajectory of the Singapore property market. 

Buyers and sellers stepping into the property market would do well to consider these nuances.

While the fundamental strength of the market remains intact, underscored by a stable political environment against more unstable markets in conflict regions, the property price trend in Singapore in 2024 might lean towards a more balanced and sustained path of growth.

Economic Undercurrents Influencing Private Property Prices for 2024

As we delve into the landscape of the Singapore property market in 2024, it is imperative to recognise the influence of both global and local economic factors. The year begins under the shadow of a global economic slowdown, a repercussion of lingering geopolitical tensions and uncertainties that have rippled across international markets. This global slowdown is not just an abstract concept but a tangible force that directly impacts Singapore’s economy and, by extension, its property market.

The high mortgage rates are at the heart of the domestic market’s dynamics, a trend continuing from the previous year. 

These elevated rates, due to tightening monetary policies aimed at curbing inflation, have introduced a new level of financial consideration for potential property buyers in Singapore. The higher cost of borrowing inevitably impacts buyer sentiment and affordability, influencing the decision-making process of both investors and sellers.

However, there is a silver lining as the Monetary Authority of Singapore (MAS) projects a brighter economic scenario in the latter half of 2024. This optimism is anchored in the strength of Singapore’s labour market, which has remained resilient amidst global challenges. A robust labour market, characterised by low unemployment rates, instils economic confidence. It suggests a steady income stream for residents, which is crucial in maintaining a healthy demand for housing.

Furthermore, the Singapore government’s strategic approach to land sales underpins the property market’s stability and growth. By carefully calibrating the land supply through the Government Land Sales programme, the government can manage the pace of new developments and, in turn, influence property prices. This controlled land release ensures that the market is balanced, helping to balance supply and demand.

As such, while the start of 2024 might be marked by caution due to external economic pressures and high mortgage rates, the latter part of the year holds promise, offering opportunities for those who are well-informed and strategic in their approach to property investment.

Maximising Your Investment by Engaging Expert Consultants in Real Estate

Image: Kaizar Karkaria (left) and Sunita Gill (right), Co-Founders at Singapore Luxury Homes

Engaging a top 1% real estate consultant, like Singapore Luxury Homes, significantly benefits both sellers and buyers in the property market. For sellers, our real estate experts leverage their in-depth understanding of property price trends and market growth, ensuring the best possible sales price through strategic timing, effective marketing, and skilled negotiations. 

Our team’s keen insight into current trends and future projections enables them to position your property advantageously in a competitive landscape. Buyers, too, gain immensely from a consultant’s expertise. 

Beyond finding properties that meet immediate needs, our consultants offer a deeper long-term value analysis, assessing potential appreciation based on location and market trends. They navigate the complexities of pricing and negotiations, ensuring buyers make a sound investment that aligns with their financial and lifestyle goals. 

Ultimately, a top real estate consultant like Singapore Luxury Homes is an invaluable partner, offering a comprehensive understanding of property prices and market dynamics to guide buyers and sellers toward successful and satisfying property transactions.