According to data released by the government on Monday, the price of private homes in Singapore increased in the first quarter of 2024. The increase was 1.5 percent, following a 2.8% rise in the fourth quarter of 2023.

The market’s resilience is reflected in the fact that prices remained stable despite a 20% drop in sales volume during the last quarter.

Due to land and construction costs, private home prices are expected to remain high in the new launch markets.

Prices are stabilising ahead of the expected arrival of around 10,000 private homes by 2024.

In an uncertain economic climate, buyers are becoming more selective. The average price of a private home has risen by 34.5 percent since Q1 2020.

The negative news flow from the slews of layoffs in companies, even if they were global, could have hurt buying sentiment at the start of this year.

Urban Redevelopment Authority’s (URA) latest data shows that landed home prices continue to outperform all other sectors in the first quarter. They increased by 3.4% after an increase of 4.6% in Q4.

Limited supply, high construction costs and local upgrade aspirations continue to support prices.

Prices of non-landed properties in Hong Kong increased by 1 percent in Q1 compared to the 2.3% increase recorded in the previous quarter.

The Core Central Region (CCR) was the main driver of price increases. Prices rose by 3.1 percent, following a gain of 3.9 percent in the fourth quarter.

The two most expensive non-landed homes transactions in CCR were the resale of two units from The Ritz-Carlton Residences Singapore Cairnhill. Each unit sold for S$16.5m – S$5,397 psf.

Cuscaden Reserve which was relaunched in Mar 16 may also contribute to the slight increase of CCR index price, as it has sold so far 80 units with an average price slightly over S$3,000 per sq ft.

Prices of non landed homes in the suburbs of Outside Central Region (OCR) increased at a slower rate of 0.4% in Q1, following a jump of 4.54% in Q4.

Prices in the OCR are likely to rise due to strong sales at Lentor Mansion.

URA caveats state that 402 units, or about three quarters of the Lentor Project, were sold during its launch in mid-March at an average price of S$2,278 per square foot, making it this year’s best-performing launch.

Prices of non-landed properties in the city fringe or Rest of Central Region, however, have recovered from a 0.8% decline in 2023 Q4 and increased by 0.2% in Q1.

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The prices are stabilising in particular in the RCR. New sales in RCR hover around S$2,500 per sq ft, while resale is around S$1,700 in RCR. For new and resale OCR houses, the price ranges between S$2,200 and S$1,400.

As the market becomes more regulated, demand may plateau.

In Q1 2020, Singaporeans and PRs made up 98.5 per cent of home buyers. Foreigners accounted for only 1.1 per cent. In Q1, foreigners purchased 35 residential homes, down from 66 purchases in Q4.

The total volume of transactions in Q1 was 3,482 units. This is down 20% from Q4’s 4,334 units and 16% lower than the previous quarter.

The total annual transaction volume in 2023 is already the lowest it has been since 2016.

The total transaction volume includes new sales, resales, subsales and executive condo units.

Due to rising interest rates, looming uncertainty in the economy, and a rise in retrenchment, buyers are being more cautious about committing to home purchase.

Some people are waiting to buy a home, hoping that the interest rates will drop in the second half 2024.

URA will release its complete set of Q1 property market data on April 26.