Property Herald: Private Housing Price Growth Driven by Demand for New Residential Launches

Introduction

The Singapore private housing price index increased 0.6% quarter-on-quarter (qoq) in the first quarter of 2025 (1Q 2025), according to the flash estimates released by the authorities today.

Among the three martket segments, the strongest housing price growth in the first quarter is seen in the city-fridge area of Rest of Central Region (RCR), with an expansion of 1.0% qoq.

Reasons for the price increase: Strong Housing Demand for New Launches

The increase in the private housing price index in 1Q 2025 is mainly driven by the higher prices and demand for residential properties launched by real estate developers in the past three months,

About 52.2% of the 6,374 private housing units transacted in the first quarter of this year were in the primary residential martket, based on currently available data. Among the 3,330 private homes sold by developers in the first quarter, about two out of every three units sold or 66.5% were located in the suburban areas or Outside Central Region (OCR).

This is not surprising as among the eight major residential projects launched in the first three months of the year, five projects with a total of 3,044 units are located in the OCR. Sales at these new launched were red hot. The developers managed to off load between 65% and 93% of the units in each of the new launches within the first two days of the release of each project.

Reason for slowdown in price growth

The slower growth of private housing prices in 1Q 2025 compared to the preceding quarter is slightly surprising, given the strong buying demand in the primary housing market.

A possible reason for the relatively slowerprice increase is partly because the 4Q 2024 property price growth of 2.3% is not sustainable in the medium to long term as it exceeds the growth rate of household income.

Furthermore, the price growth of resale housing units in the January to March quarter could have been slower than that of the price increase of primary sales, contributing to the deceleration of the price expansion.

Upcoming New Residential Launches in April

At least four residential projects wiith a total of 1,420 units are expected to be launched in April 2025. Two of the projects, such as One Marina Gardens and Bloomsbury Residences are the first major residential developments in their respective locations. Hence, they will be setting the new benchmark housing prices in those locations, which could be higher than previous launches in neighbouring locations.

Table 2: Expected New Residential Launches in April 2025

Project	Location	Market Segment	Tenure	Total No. of Units
One Marina Gardens	Marina Gardens Lanes	RCR	99 years	937
Bloomsbury Residences	Media Circle	RCR	99 years	358
21 Anderson	Anderson Road	CCR	Freehold	18
Arina East Residences	Tanjong Rhu Road	RCR	Freehold	107

Source: Mogul.sg Research

Residential Property Price Indices

Robust growth for over seven years

The private residential property index had not suffered any major correction since 2Q 2017. In the past 7 years and 9 months, there were only five quarters wen the price index decreased. However, these were minor contractions where the price index declined by less than 1.1% in each quarter and rebounded robustly in the subsequent quarters.

From 2Q 2017 to the first quarter of this year, the private housing price index had increased by 54.2%. By comparison, the previous property market boom from 2Q 2009 to 3Q 2013 lasted 4 years and 3 months.

The current property market growth cycle had outlasted the 2009 to 2013 market boom. However, there are some dark clouds in the horizon which could moderate the pace of property price appreciation.

Outlook

The health of the financial markets are often used as a forward indicator of the economy. The S&P 500 index, which is widely used proxy for the overall health of the U.S. stock market, is down by 5.1% so far this year. This is a reflection of the market's worry about the effects of the higher tariffs to be imposed by the new US administration, which can lead to slower global economic growth and higher inflation.

So far, the Singapore residential property market is remarkably resilient as it appears to be unperturbed by the forthcoming trade war. The local property market sentiments are also buoyed by the healthy local stock martket as illustrated by the 4.9% year-to-date growth of the Straits Times Index.

However, the Singapore economy is heavily dependent on trade. Hence, our economy could eventually be adversely affected by the impending global trade friction.

Real estate demand and price growth are dependent on the health of the economy, employment market and household wealth. Therefore, it is only a matter of time before the local real estate market would feel the chill from the fallout of the global trade friction.

In the meantime, private housing demand and price growth could still expand as homebuyers may hold a medium-term outlook of 3 to 4 years. When a homebuyer purchases a private home today, typically they are prepared to hold the property for at least 3 years to avoid paying the 3-year seller's stamp duty. Hence, the buyer may view that when it is time for them to sell their property about 3 years or more from now, the second Trump presidency would be coming to an end. This cold contribute to the continuing bullishness in the Singapore housing market.

Therefore, we expect private housing prices to continue to increase this year. For the whole of 2025, the private residential price index could rise by 3% to 6% yoy.