HomeReal EstateWhat is The Outlook for Singapore Home Prices in 2024?
Will Singapore Home Prices Fall In 2024

What is The Outlook for Singapore Home Prices in 2024?

Singapore Prime Home Prices To Fall In 2024 According To Savills

Global Housing Prices Forecast 2024

According to Savills World Research, Singapore is among 17 global cities forecast to see residential prices fall this year. Weaker sentiment associated with higher interest rates and the challenging economic landscape is to be blamed. 

Suffering from weaker sentiment associated with higher interest rates and the challenging economic backdrop, the prime residential markets of Los Angeles, New York, San Francisco, Seoul, London, Singapore, and Hong Kong are all forecast to decline this year. Chinese locations Guangzhou, Hangzhou, and Shenzhen are forecast to see price falls over 2024, as the property market volatility and restrictive government policy to try to stabilise the market take effect in these cities

“Inflationary pressures will gradually abate – necessitating ‘higher for longer’ interest rates and the likelihood of a sustained period of weak global growth,” says Kelcie Sellers, Associate at Savills World Research. 

Singapore and San Francisco are projected to see property prices fall in the range of 3.9% and 2%. Projected price falls for London, New York and Paris will likely be between -1.9% and <0%.

A muted domestic economy and a weaker mainland China will have an impact on Hong Kong’s prime residential market, with price falls more than -10% expected. With 2023 seeing low levels of market sentiment and the trend expected to continue through 2024, it is likely that the market will see further price falls and more distressed sales. Despite this, the market will remain the world’s most expensive city for prime residential prices on a per square foot basis.

Even though prime residential property is less mortgage-reliant than mainstream residential property, weaker macroeconomic conditions are expected to dent sentiment. Thus, many potential buyers and sellers will likely adopt a wait-and-see approach in an environment with a higher interest rate.

A softer market presents opportunities for high-net-worth individuals to buy properties in prime locations. “Wealthy families will also take up this opportunity to invest for the next generation,” says George Tan, managing director of Livethere Residential at Savills Singapore.
While the high-end residential market was affected by the imposition of a 60% levy on foreign buyers, “the relatively low supply in this segment will allow the market to find a price floor and, over time, will create a stronger foundation”, says Alan Cheong, head of research at Savills Singapore. “This means that with less new supply from 2025 onwards in the high-end residential market, prices will likely reach a point of stabilisation soon.

Global Prime Residential Property Market

Sydney is seeing high levels of demand for quality prime homes, but supply remains low. An imbalance is likely to persist through 2024, pushing up prices in the city, forecast to increase between 8% and 9.9%.

Dubai continues to be the leading hotspot for prime residential property, with capital values increasing 17.4% for the year 2023, with 5.6% recorded in the second half. The market is still relatively competitively priced, by global standards, at US$850 per square foot, offers a comparatively low cost of living, a relatively easy visa process, and warmer climate which continues to attract international and domestic buyers. However, it is likely that this rate of growth will slow over the course of 2024 to around 4% to 5.9% as we see a return to a more ‘normal market’.

Bangkok, Tokyo, and Mumbai round out the top five locations with highest price growth over 2023, with each market seeing demand outstrip supply over the course of the year. Tokyo is a notable standout with increasing in-migration to the city in the post-pandemic era, new prime developments are attracting more buyers, and the market has proved remarkably resilient as one of the only leading global markets which hasn’t seen rising interest rates, further underpinning the residential markets.

Hong Kong’s ongoing political and economic uncertainty continued to hamper its prime residential markets. Prime prices in the city fell by -3.7% over 2023, but it remains the most expensive prime residential market in the world at US$3,970 per square foot.

Global Prime Property Prices
Source: Savills Research

Singapore Is The Most Expensive Housing Market For Foreign Buyers

The cost of buying, holding, then selling a prime residential property stands at 15% of the purchase price, on average, across the 30 global cities. This ranges from just 6% in Chinese cities, to 65% in the case of Singapore. Last year, in a bid to manage demand, Singapore doubled its Additional Buyer’s Stamp Duty (ABSD) for overseas buyers from 30% to 60%. By contrast, Hong Kong halved its stamp duties for non-permanent residents, bringing its costs in line with the world city average. This marked the first time in over a decade that such measures have been cut and aim to stimulate a market that has cooled significantly in the last five years.

Singapore is the most expensive housing marketing for foreign buyers
Source: Savills Research

Final Thoughts On Singapore Property Market

At The Landed Collective, we think that developers will price new condo launches in the CCR attractively due to the absence of foreign buyers in the market. Nonetheless the narrower gap between CCR and RCR housing prices have attracted local buyers to take action in new condo launches in the Central Region. 

Sellers with strong holding power are still wanting to price their properties higher than market expectations and they are ok to wait for 3 to 6 months for the right buyer to come along. This may be an opportune time to re-balance the portfolio and wait out for good buys to surface in the event that Singapore home prices fall to your target price range.

(Source: Savills, EdgeProp)