Singapore Home Prices Dip Slightly as New Sales Revive Market Momentum

Singapore’s private home prices declined less than anticipated in the third quarter, as a surge of new property sales in late September helped reduce the drop, while rental prices saw an uptick for the first time since 2023.

According to figures from the Urban Redevelopment Authority released Friday, the index of private residential valuations fell by 0.7% compared to the previous quarter. This final figure is an improvement over the earlier estimated 1.1% decline, which was based only on transactions recorded up to mid-September.

The dip, marking the first drop in private home prices in five quarters, followed a slowdown in sales influenced by rising interest rates and stricter purchasing restrictions. Developers, however, are optimistic that this decrease is temporary, especially as borrowing costs start to ease and buyers continue to show interest in newly launched residential projects.

Rental prices for private homes also rose by 0.8%, reversing a 0.8% drop in the second quarter and halting three straight quarters of decline. This increase could contribute to growing concerns over housing affordability in Singapore, where both property values and rents surged during the pandemic. In response, authorities have enacted several cooling measures as the ruling People’s Action Party works to address voter concerns in the lead-up to an election expected by the end of next year.

To address the demand, the government aims to expand housing supply, planning to auction the most private residential land seen in over a decade. The URA reported that around 52,200 new private housing units are projected for completion in the coming years.

Despite these efforts, developers have slowed new project launches and maintained selective, lower bids for land, keeping prices high even as transaction volumes fall. Developers have also indicated an unwillingness to lower prices, even if total new sales are on track for their lowest level since 2008.

Some segments of local demand have helped sustain positive sentiment. Developers sold 1,160 new private residential units in the third quarter—a notable 60% increase from the previous quarter. This includes a project in Bukit Timah’s prime district, which sold over half of its 158 units in September.

City Developments Ltd., Singapore’s largest listed developer, recently launched a separate project that quickly became the country’s best-selling project of the year, with 84% of its 348 units sold despite an average rate of $1,567 per square foot, setting a record for the northern suburban area near the Malaysian border.

Analyst Brandon Lee from Citigroup Inc. observed in a note this week that the successful performance of the Norwood Grand project could potentially apply upward pressure on private residential prices in the fourth quarter.

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