A recent report by OrangeTee Research & Analytics revealed that private resale home prices remained stable in the third quarter of 2024, despite the prevailing high-interest rate environment. Data from the Urban Redevelopment Authority (URA) showed that the average resale prices for both landed and non-landed private residential properties, excluding executive condos (ECs), remained steady at $1,713 per square foot (psf) from 2Q2024 to 3Q2024.
However, there were slight fluctuations in average resale prices within different regions. Prices in the Core Central Region (CCR) saw a 1.6% increase from $2,145 psf in 2Q2024 to $2,181 psf in 3Q2024. This partially reversed the 3.6% price drop recorded in the previous quarter. Similarly, prices in the Rest of Central Region (RCR) also saw an increase of 1.4%, growing from $1,837 psf to $1,863 psf. However, this growth was lower compared to the 3.1% increase seen in the previous quarter. On the other hand, prices in the Outside of Central Region (OCR) dropped by 0.4%, from $1,495 psf to $1,489 psf, marking a turnaround from the 3.5% growth in resale prices seen in 2Q2024.
Despite the fluctuations in prices, there was still strong demand for resale homes. According to URA records, there were 3,860 resale homes sold in 3Q2024, which is a 1.5% increase from the 3,802 units sold in the previous quarter. Resale transactions made up 71.9% of the total 5,372 residential sales (including new sales, resale, and subsale) in 3Q2024. However, this was a decrease from the record high of 77.4% market share in the previous quarter, as reported by OrangeTee.
The first nine months of 2024 saw a total of 10,351 resale homes sold, a 21.8% increase from the 8,498 units transacted in the same period in 2023. The market share of resale homes also increased from 57.8% of residential transactions in the first three quarters of 2023 to 71.3% in the same period this year. This rise in demand can be attributed to the increase in housing supply, with almost 30,000 private homes completed in the past two years. With a wider range of options available, buyers may turn to the secondary market for more affordable private housing as new home prices remain high.
The recent launch of Norwood Grand, a new condo in the OCR, saw 293 units sold at an average price of $2,086 psf since its launch in October. This represents a 39.5% premium over the average price of $1,495 psf in the region. Similarly, Meyer Blue, a new project in the RCR, sold 122 units at an average price of $3,252 psf in the same month, which is 74.5% higher than the average resale price in the RCR.
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With the recent interest rate cuts by the US Federal Reserve, OrangeTee predicts that there may be an increase in luxury home sales due to the lower cost of borrowing. However, high-net-worth investors who are less affected by interest rate fluctuations may still base their property purchase decisions on other factors. Nevertheless, buyers who were previously hesitant due to high interest rates may now be more inclined to enter the market.
OrangeTee also expects resale prices to continue growing in the next few years due to the projected decrease in available stock. While around 9,100 private homes are expected to be completed in 2024, this number is expected to decrease to approximately 5,300 in 2025. As such, OrangeTee foresees positive prospects for resale homeowners, barring any major economic crises or unforeseen circumstances.