Private Residential Resale Prices Hold Steady 3Q2024
A new report by OrangeTee Research & Analytics shows that private resale home prices in 3Q2024 remained stable despite the current high-interest rates. According to data from URA, the average resale prices for landed and non-landed private residential homes (excluding executive condos) stayed at $1,713 psf from 2Q2024 to 3Q2024. However, there were fluctuations in average resale prices within the Core Central Region (CCR), Rest of Central Region (RCR), and Outside of Central Region (OCR).
During this period, prices in the CCR saw a slight increase of 1.6% from $2,145 psf to $2,181 psf, partially reversing the 3.6% drop in prices seen in the previous quarter. Similarly, prices in the RCR also increased by 1.4% from $1,837 psf to $1,863 psf, which was a moderation from the 3.1% growth in the previous quarter. In contrast, the average price of private residential resale homes in the OCR dropped by 0.4% from $1,495 psf to $1,489 psf in 3Q2024, a turnaround from the 3.5% increase seen in 2Q2024.
Despite the high-interest rates, there was still robust demand for resale homes, with URA recording 3,860 units sold in 3Q2024, a 1.5% increase from the previous quarter. This accounted for 71.9% of the total 5,372 residential sales in the same period, a slight decrease from the 77.4% market share in 2Q2024, which was the highest on record, according to OrangeTee.
In the first nine months of 2024, there was a 21.8% year-on-year increase in resale home transactions, with a total of 10,351 units sold compared to 8,498 units in the same period in 2023. The market share of resale homes also saw a similar increase, growing from 57.8% in the first three quarters of 2023 to 71.3% in the same period this year.
This strong demand for resale homes can be attributed to the significant increase in housing supply, with close to 30,000 private homes completed in the past two years. As the available supply increases, it provides more options for potential buyers. Additionally, the high prices of new private homes may push buyers towards the secondary market for lower-cost options.
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Recent launches in the OCR, such as Norwood Grand and Meyer Blue, have seen strong sales, with prices at a premium compared to the average resale prices in their respective regions. This suggests that buyers are still willing to pay a premium for quality resale homes.
With the recent interest rate cuts by the US Federal Reserve, there is potential for luxury home sales to increase due to the lower cost of borrowing. However, high-net-worth investors may not be as affected by interest rate fluctuations and may not base their purchase decisions on mortgage rates. Nonetheless, the report predicts that buyers who were previously cautious due to high interest rates may now be more inclined to enter the market.
OrangeTee forecasts that resale prices will continue to grow in the coming years due to the projected decrease in available stock. This year, around 5,300 private homes are expected to be completed, compared to 9,100 units expected in 2025. Therefore, the report predicts positive prospects for resale homeowners, barring any major economic crises or unforeseen circumstances.